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| Version 0 | Version 1 |
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| Tax letters: Fewer than 20% due to Revenue mistakes | Tax letters: Fewer than 20% due to Revenue mistakes |
| (about 1 hour later) | |
| Fewer than 20% of taxpayers currently being told they owe extra money to HM Revenue & Customs (HMRC) will be able to have the tax written off. | Fewer than 20% of taxpayers currently being told they owe extra money to HM Revenue & Customs (HMRC) will be able to have the tax written off. |
| About 1.4 million people owe tax because of underpayments in financial years 2008-09 and 2009-10. | About 1.4 million people owe tax because of underpayments in financial years 2008-09 and 2009-10. |
| If an underpayment was due to a Revenue mistake, then it can be written off under a policy known as the extra-statutory concession. | If an underpayment was due to a Revenue mistake, then it can be written off under a policy known as the extra-statutory concession. |
| But Revenue officials say only a minority involved mistakes. | But Revenue officials say only a minority involved mistakes. |
| The figure was revealed in evidence to the MPs on the public accounts committee. | The figure was revealed in evidence to the MPs on the public accounts committee. |
| "At the moment, only a minority of the underpayments are caused by Revenue error, which would make them eligible for writing off under the concession," said Sarah Walker, the Revenue's director of PAYE, self-assessment and national insurance. | "At the moment, only a minority of the underpayments are caused by Revenue error, which would make them eligible for writing off under the concession," said Sarah Walker, the Revenue's director of PAYE, self-assessment and national insurance. |
| "It is quite a small proportion - I think we would say it is less than 20% - and then of those, a proportion then will claim the concession and we will then write it off." | "It is quite a small proportion - I think we would say it is less than 20% - and then of those, a proportion then will claim the concession and we will then write it off." |
| The Revenue explained that each request would have to be looked at on a case-by-case basis to see if the concession applied, but stressed that it would apply only in limited circumstances. | The Revenue explained that each request would have to be looked at on a case-by-case basis to see if the concession applied, but stressed that it would apply only in limited circumstances. |
| New computer system | New computer system |
| The underpayments and overpayments were discovered when the HMRC introduced a new computer system to make the normal annual checks on people's tax liabilities and payments under the PAYE system. | The underpayments and overpayments were discovered when the HMRC introduced a new computer system to make the normal annual checks on people's tax liabilities and payments under the PAYE system. |
| This replaced the previous manual checks which had involved comparing information from 12 separate databases. | This replaced the previous manual checks which had involved comparing information from 12 separate databases. |
| The new computer system highlighted the fact that in the 2008-10 period, more than six million people had paid the wrong amount of tax. | The new computer system highlighted the fact that in the 2008-10 period, more than six million people had paid the wrong amount of tax. |
| While some 1.4 million people are now receiving demands for extra tax totalling about £2bn, 4.3 million others will be receiving cheques to compensate them for previous overpayments amounting to £1.8bn. | While some 1.4 million people are now receiving demands for extra tax totalling about £2bn, 4.3 million others will be receiving cheques to compensate them for previous overpayments amounting to £1.8bn. |
| A further 900,000 potential demands for tax arrears were scrapped by Treasury ministers because the sums involved were all for less than £300. | A further 900,000 potential demands for tax arrears were scrapped by Treasury ministers because the sums involved were all for less than £300. |
| Ms Walker estimated that 70% of the letters being sent out in batches would be delivered by Christmas, with the rest being delivered by the end of January 2011. | Ms Walker estimated that 70% of the letters being sent out in batches would be delivered by Christmas, with the rest being delivered by the end of January 2011. |
| The Revenue is hoping to collect £2bn from those who did not pay enough tax in previous years, though this amount may be reduced by successful claims from taxpayers that the Revenue was at fault. | The Revenue is hoping to collect £2bn from those who did not pay enough tax in previous years, though this amount may be reduced by successful claims from taxpayers that the Revenue was at fault. |
| Due to concern about the apparent unfairness of levying extra tax bills, the government has decided that those who have to pay more than £2,000 will not have to pay interest if they need extra time to pay. |