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News from TaxAid.
THERE CAN BE few in the tax profession who have not heard of TaxAid, although a sobering report undertaken by KPMG a year ago illustrated how few understand the impact of tax on those on low incomes, and the consequent need for TaxAid's continuing existence. Consider the following facts:
News from TaxAid.
THERE CAN BE few in the tax profession who have not heard of TaxAid, although a sobering report undertaken by KPMG a year ago illustrated how few understand the impact of tax on those on low incomes, and the consequent need for TaxAid's continuing existence. Consider the following facts:
- individuals are potentially taxpayers if their income exceeds £87 a week;
- £15 million people in the United Kingdom earn less than £190 a week;
- one million of the self employed are in the latter category.
Add to all this the increased complexity of taxable, and non-taxable, benefits and credits, and it is not surprising that people on low incomes find it difficult to understand the tax system without someone to guide them through the minefield. They are as ill equipped to cope as those at higher income levels who have recourse to professional advice when the Revenue gets their tax wrong, launches an enquiry or chases them for tax that they do not owe or cannot pay.
Illustration 1: Mr D Mr D was facing bankruptcy by the Revenue for a sum of nearly £80,000. The tax was based on estimated assessments for the years when he had given up his work as a mechanic to look after his elderly mother who was confined to a wheelchair and needed constant care. When she eventually died, Mr D then had sole care of a brother with Downs Syndrome. He had tried to convince the Revenue that he had not been working, but to no avail. A TaxAid adviser helped Mr D put his case to the Enforcement Office, backed up with evidence of his circumstances. The Enforcement Office agreed to use the principle of equitable liability to cancel the demand and drop the bankruptcy proceedings. |
Illustration 2: Mrs W Mrs W's husband died in August 1998 leaving no estate, and Mrs W had informed the Revenue of his death at that time. Three years later the Revenue sent Mrs W (as his executor) a tax demand for an underpayment of tax of £651.21, giving the impression that the three years were a generous extension in time to pay. Mrs W, on the other hand, quite reasonably believed that the tax was up to date. Quite apart from the fact that Mrs W was an elderly widow in ill health living on benefits in rented accommodation, the Revenue had failed to consider whether the claim was covered by Extra-statutory Concession A19, in that it had sufficient information but failed to use it in time. |
