Government is 'failing low income taxpayers'

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.”