Government is 'failing low income taxpayers'

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Philip and Sarah McNeill
Tax writers and lecturers
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The government is failing to resource and support vulnerable low-income taxpayer access to the tax system.

That was the view expressed by new Low Incomes Tax Reform Group (LITRG) Chair, Anne Fairpo, as she called for renewed government support on her first day in office. Sarah McNeil reports.

Remit

Fairpo pledged LITRG’s ongoing support for unrepresented individuals on low incomes, together with the aim of providing a ‘premier source of tax information for the public’.

Those with ‘precarious earnings, students, pensioners, disabled people and claimants of tax credits and universal credit’ form LITRG’s particular remit.

Failure

Current failure by government departments to provide adequate taxpayer support is behind rising public demand for help from sources outside the tax system, Fairpo said.

“Feedback … from members of the public strongly suggests that government departments are failing to provide the necessary quality of guidance and levels of support to ensure that unrepresented individuals on low incomes can fully comply with their obligations or understand their entitlements under the tax and related welfare systems,” she said.

Not a lone voice

In highlighting the gap between public demand and available resources, Fairpo is not a lone voice.

AccountingWEB has recently covered the ‘Bridge the gap’ campaign run by tax charities TaxAid and Tax Help for Older People.

Both charities are concerned that – despite HMRC funding - resources are over-stretched by increasing public demand.

And incoming President of the Chartered Institute of Taxation (CIOT), John Preston, used his inaugural speech on 9 May to put the same message.

Implicated

HMRC is clearly one of the departments implicated  - not just in Fairpo’s remarks, but in John Preston’s as well.

Obligation

“If the Government continues to maintain a complicated tax system, surely they have an obligation to ensure that they explain it properly to those least able to deal with it,” Preston said.

Fairpo pointed out the “huge amount” of information that LITRG websites and guides provide to low income taxpayers.

“But really this is something which should be being done by government or by voluntary community groups at government expense.”

Concerned

“At the risk of being controversial,” Preston said, “I am really concerned that shortage of funds means that HMRC and the government are failing to provide the necessary levels of support.”

“LITRG is sometimes doing things that unquestionably should be done by government."

MTD

MTD is also something LITRG worries about for its client group.

Fairpo’s belief is that MTD should not be mandatory for business below the VAT limit.

“We will push HMRC to urgently assess and make public how it intends to support the digitally assisted population, and business owners with disabilities that require the use of assistive technology to achieve the goals of Making Tax Digital.”

Replies

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19th May 2017 11:32

Somedays (OK most days) politicians make me want to shout at medium conveying their message.

Winter fuel allowance for example.. "Let's not give it to wealthy pensioners" says one side, "what, and have poor pensioners freeze to death", says another.

So we will get another income dependent retrospectively calculated tax adjustment to complicate life for pensioners. I thought the demise of the income related age allowance, demonstrated an understanding that this type of arrangement is best avoided as overly complex.

Why not just make the fuel allowance taxable alongside the normal pension? Simple, fair and easy to administer.

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19th May 2017 13:48

Surely this should read:
Government is failing. Full stop!
Can you tell I am pi$$ed off with it all?

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22nd May 2017 10:18

Having read this article I am not sure what failure. The personal allowance is now at an all time high. You are in poverty if your income is below £16000 ish.

If the failure is providing helpful information then HMG are doing that to all income groups. Even the passport office website has errors. Looking back before computers and the web the NIC office was advising married laddies to pay the married women's stamp which meant that they did not get full pension credits.

So no change

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22nd May 2017 10:59

The fair thing to do is to leave it to each individual whether he/she wishes to give it away or not. Why should any government make the decision? Rich or poor surely they have all contributed to the governement throughout their working lives!!

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By 7555775
22nd May 2017 11:39

For some reason HMRC keep sending me invitations to webinars and so on concerning educating me about various topics such as which expenses are allowable for tax deduction, what expense can I claim if I use my own car etc. etc. I don't know why HMRC have taken on this task of educating taxpayers as whatever they do the tax payer will still not understand it. So to say low income taxpayers are left in the lurch is not true. What I would like to know is why HMRC are spending money on this programme? I also hate to keep going on about MTD but when I last looked at one of their approved software packages it had a menu option of estimate my tax. So it's not going to do it properly, I suppose we should be grateful that they have at least recognised its limitations. Can HMRC answer the question "Is an estimate of the tax payable now an acceptable figure using one of their approved software packages".

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25th May 2017 16:48

Probably more of an issue on the welfare side than the tax but the system is still far too complicated. Office of Tax Simplification - a bit of work still needed!

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14th Jun 2017 13:54

HMRc need some more staff, in certain areas anyway.

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