§ Mr. Steelasked the Chancellor of the Exchequer if he will make it his policy that, where tax arrears result from errors made by the Inland Revenue, there be no obligation on the taxpayer to pay such arrears.
§ Mr. LawsonThe general rule is that tax arrears remain legally payable, whether or not the underpayment is attributable in some measure to Inland Revenue error. The Inland Revenue does, however, operate an extra-statutory concession under which arrears of tax may be wholly or partly waived if they have arisen because of a departmental error which involved the failure to make proper and timely use of information about income or personal circumstances supplied by the taxpayer so that he could reasonably believe that his affairs were in order.
The proportion of arrears remitted under this practice varies according to the size of the taxpayer's income. The terms of the concession (ESC A19) are published in the Inland Revenue's list of extra-statutory concessions.