§ Mrs. Currie
asked the Chancellor of the Exchequer whether there has been any further review of the income limits which govern the Inland Revenue's practice for remitting arrears of tax which have arisen through official error.
§ Mr. Moore
Yes. The Inland Revenue's practice of remitting tax in cases of official error is set out in a White Paper of July 1971 (Cmnd. 4729), under which the proportion of arrears collected varies according to the size of the taxpayer's gross income; the balance of the arrear is remitted. The scale has been revised several times since 1971; the current scale, introduced in July 1984, is as follows:
Gross income Percentage of arrears Collected Remitted Not above £8,000 None All £8,000 but not above £10,000 0.25 0.75 £10,000 but not above £12,500 0.50 0.50 £12,500 but not above £15,000 0.75 0.25 £15,000 but not above £21,500 0.90 0.10 £21,500 All None
It has been decided to increase these limits. The new scale of limits will apply to arrears of tax, the actual or likely amount of which is first notified to the taxpayer or his agent on or after today. The date of notification will also be the date for testing eligibility for the pensioners' limits.
The scale generally applicable will be:495W
Gross income Percentage of arrears Collected Remitted Not above £8.500 None All £8,500 but not above £10,500 0.25 0.75 £10,500 but not above £13,500 0.50 0.50 £13,500 but not above £16,000 0.75 0.25 £16,000 but not above £23,000 0.90 0.10 £23,000 All None
In the case of taxpayers aged 65 or over or who are in receipt of the National Insurance retirement or widows' pension each of the above limits will be £2,500 greater. If a taxpayer in this category has gross income of £11,000 or less the whole of the arrears will be remitted, whilst some remission will be allowed on gross income up to £25,500.