§ Mr. Kenneth Carlisleasked 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. RidleyYes. 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 April 1982, is as follows:
Percentage of arrears Gross income Collected Remitted Not above £7,000 None All Above £7,000 but not above £9,000 25 75 Above £9,000 but not above £11,500 50 50 Above £11,500 but not above £14,000 75 25 Above £14,000 but not above £19,500 90 10 Above £19,500 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 is £2,000 greater.
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' higher limit.
The scale generally applicable will be as follows:
Percentage of arrears Gross income Collected Remitted Not above £7,500 None All Above £7,500 but not above £9,500 25 75 Above £9,500 but not above £12,000 50 50 Above £12,000 but not above £14,500 75 25 Above £14,500 but not above £20,500 90 10 Above £20,500 All None The special increase of £2,000 in each of the income limits for taxpayers, who at the date of notification are aged 65 or over or in receipt of the national insurance retirement or widows' pension, will continue. If a taxpayer in this category has gross income of £9,500 or less, the whole of the arrears will be remitted, whilst some remission will be allowed on gross income up to £22,500.