Taxman hounds the vulnerable for debts they don’t owe as nearly nine out of ten people who take their case to arbitration win

Thousands of vulnerable people are being pursued for tax debts they shouldn’t have to pay and are having legitimate complaints fobbed off by the taxman, Money Mail can reveal.

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A bombshell independent report by the influential Adjudicator’s Office accuses HM Revenue & Customs of mistreating elderly and vulnerable taxpayers and failing to take account of their circumstances.

It found that nearly nine out of ten people who take their case to arbitration win.

Often these disputes have dragged on for months as the taxpayer struggles to get their problem taken seriously.

n a damning assessment, the report by the Adjudicator – who acts as a referee looking into complaints against HMRC – accuses officials of having a ‘limited appetite for reflection and learning from their interaction from customers’.

Over the 12 months to March 31, the Adjudicator received more than 11,600 enquiries from the public about rotten treatment at the hands of HMRC, the Insolvency Service and the Valuation Office Agency – though the taxman generated the overwhelming majority of these.

For the Adjudicator to intervene in a case, the taxpayer has to have hit a dead-end with HMRC.

In total, the Adjudicator resolved 1,808 complaints about HMRC – of these, 1,543, or a staggering 85 per cent, were settled in the consumer’s favour.

Robin Williamson, director of the charity Low Incomes Tax Reform Group, says: ‘Those who’ve persevered to take their case to the Adjudicator have already been through the mill, refused to give up and kept on at HMRC with their complaint.

‘Far too many will have given up or not even known they can take their complaint beyond tax officials to a watchdog. They’ll just have written off the money.’

In total, the taxman was ordered to pay out £244,000 for poor complaint handling and triggering worry and stress. Overall, its errors led to £2.9million of tax it claimed was owed being written off.

In her report, Adjudicator Judy Clements says: ‘I’m critical of the number of complaints where HMRC staff failed to consider the circumstances of their vulnerable customers – especially where [they] had the opportunity to exercise discretion.’

She also highlighted a number of particularly worrying cases where HMRC had failed to act fairly. In one example, Ms A, who suffered from severe dyslexia, had asked for documents to be sent in a larger print size.

This took a while to create, so she ended up receiving a letter on February 10 relating to a self-assessment tax return, which requested she pay her bill by January 31.

She phoned HMRC to say the letter was too late and no payslip to settle her debt to the Revenue was enclosed.

Her payment deadline was extended, but the payslip arrived too late for her to meet the new deadline, so she ended up being hit with interest and penalties.

The Adjudicator was critical of the Revenue for its lack of understanding of Ms A’s personal circumstances.

In another case, Mr B complained because HMRC had failed to update his tax code – as a result, he underpaid tax. He filed a request to have this debt written off using a legal waiver called Extra Statutory Concession A19.

HMRC turned this down, but the Adjudicator ruled that Mr B’s debt should be written off. This is just the latest evidence of faltering customer service at HMRC.

In September, a report from Citizens Advice found thousands of people were waiting an average of 47 minutes to get their calls answered. The National Audit Office also recently criticised HMRC for answering too few calls inside five minutes.

Earlier this year, the Revenue was forced to admit its behaviour ‘was not good enough’. Its own figures revealed how only 72 per cent of calls were answered in the 2014-15 tax year — below its 80 per cent target.

And Money Mail has frequently highlighted the fiasco faced by pensioners who try to claim the new Married Couple’s Allowance.

Read more: http://www.thisismoney.co.uk/money/news/article-3302419/How-taxman-hounds-vulnerable-debts-don-t-owe.html#ixzz3qXGMzE1E

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#bedroom-tax, #debt, #tax, #tax-credit, #tax-credits, #taxing

Commons back Osborne plan for tax credit cuts

MPs have backed government plans to cut spending on tax credits in the face of opposition from Labour and the SNP.

The Commons approved plans to lower the earnings level above which tax credits are withdrawn from £6,420 to £3,850 and speed up the rate at which the benefit is lost as pay rises by 35 votes.11709489_985449581488924_1385951511306534685_n

Ministers say the move, estimated to save £4.4bn, is part of wider plans to raise pay and incentivise work.

But Labour say it is an “ideological attack” on working families.

The curbs on tax credits were announced in Chancellor George Osborne’s post-election Budget in June.

During a 90-minute debate in the Commons, the opposition claimed three million families face losing an average of £1,000 a year from next April.

But ministers said the tax credit system had, for too long, been used to subsidise low pay and the changes would bring total expenditure on tax credits back down to more sustainable levels seen in 2007-8.

‘Cynical’

MPs backed a motion enacting the changes by 325 votes to 290.

Treasury minister Damian Hinds said eight out of 10 households would be better off by 2018-9 as a result of measures announced in the Budget to introduce a national living wage, further increase the personal tax allowance and extend childcare subsidies.

“For too long in this country, low pay has been addressed not by genuine reform and driving productivity but by subsidising the tax credit system,” he said.

“The changes introduced in this order will build on the last parliament’s reforms and return real-terms tax credit spending to the level it was in 2007-08 – a decade into the tenure of the government of the Labour Party.”

But Labour’s Seema Malhotra said the changes were being “sneaked through the back door”.

“This is a political decision made by the chancellor that is set to see over three million families lose an average of £1,000 a year,” the shadow Treasury minister said. “It is ideologically driven, it is cynical and it will directly increase levels of poverty in Britain.”

“It is part of an ongoing attack on the incomes of some of the most hard working families in our constituencies – those very strivers the chancellor purported to support.”

The SNP insisted families will have to make difficult choices about food and heating their home if they lose £100 a month, while the Lib Dems said their eight MPs had opposed the curbs on tax credits, saying they “hit low income working people who are doing the right thing”.


Source- BBC News


#benefit-cuts, #cut, #cuts, #poverty, #tax-credit, #tax-credits, #working

New immigrant residency test for benefits hits UK people as well

Make no mistake this is all by design.

It’s not the immigrants fault either.

Once again, BBC News report this during the day then omit it from the main bulletins.

#cut, #cuts, #tax-credit, #tax-credits, #young-people

Tories consider cutting tax credits for working families despite election promise not to

The following article is written by The Independent –  For the original click here.

The Government is looking at making £5bn of its planned £12bn welfare cuts by slashing tax credits for working families, reports suggest.

Around 3.7 million low-income families would lose out on £1,400 a year from the cuts, according to a scenario outlined by the Institute for Fiscal Studies.

BBC Newsnight says allies of the Chancellor George Osborne are examining the plans, which they believe would increase “work incentives”.

If the cuts go ahead they would contradict statements made by David Cameron during the general election campaign.

Asked during a Question Time special whether tax credits and child benefit were at risk, Mr Cameron said he rejected the idea.

“I don’t want to do that. This report that was out today is something I rejected at the time as prime minister and I reject again today,” he told the audience.

But government sources told the programme that they did not consider the poverty alleviation provided by the tax credit system legitimate and that it “papered over” problems.

Former minister Damian Green said the Government was right to look at the cuts despite Mr Cameron pledging they would not happen.

“The scale of the cuts, it is quite big, they are necessary and we had a government elected about a month ago on the basis of doing this,” he told Newsnight.

Labour said the cuts would make families less secure.

Before the election the Liberal Democrats leaked documents which appeared to suggest the Conservatives were considering cuts to tax credits and child benefit before the election.

Downing Street dismissed the documents at the time as “scaremongering”.

George Osborne and Iain Duncan Smith have pledged to make £12bn welfare cuts but would not expand on which cuts they would make before the election.

Officials at the DWP are likely to ministers with a list of “very, highly or extremely controversial” potential cuts to child benefits, according to documents leaked to the Guardiannewspaper before the election.

#austerity, #benefits, #child-benefit, #cut, #cuts, #in-work, #poverty, #tax-credits, #working