HC Deb 30 July 1984 vol 65 c60W
Mr. Richard Page

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 April 1983, is as follows:

Gross income Fraction of arrears
£ Collected Remitted
Not above 7,500 None All
Above 7,500 but not above 9,500 1/4 3/4
Above 9,500 but not above 12,000 1/2 1/2
Above 12,000 but not above 14,500 3/4 1/4
Above 14,500 but not above 20,500 9/10 1/10
Above 20,500 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 are £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 limits.

The scale generally applicable will be:

Gross income Fraction of arrears
£ Collected Remitted
Not above 8,000 None All
Above 8,000 but not above 10,000 1/4 3/4
Above 10,000 but not above 12,500 1/2 1/2
Above 12,500 but not above 15,000 3/4 1/4
Above 15,000 but not above 21,500 9/10 1/10
Above 21,500 All None

The special increase 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 now be £2,500. If a taxpayer in this category has gross income of £10,500 or less the whole of the arrears will be remitted, whilst some remission will be allowed on gross income up to £24,000.