Innocent pensioners hounded by taxman
Probes a world of scams and scandals
MRS J.D. writes: I am sending you correspondence I have had with the Revenue on behalf of my friend who lives in New Zealand, but is a UK taxpayer. She has been persecuted by Revenue & Customs. Like me, she is a widow.
Our husbands both worked in the Prison Service and she now lives with her daughter. You can imagine her distress at being told in 2012 that she had underpaid income tax since 2008 when her Prison Service widow’s pension started. She has been hounded to set up a monthly standing order to pay this tax, even though I believe the Revenue is clearly breaking its own rules by claiming the money too late.
It appears it is acceptable for the likes of Vodafone to have a cosy arrangement with the Revenue over its tax affairs and for Starbucks, Google and Amazon to sidestep tax, but the Revenue will stop at nothing in its persecution of an easy target. IN the past year I have received some 400 letters from people who have been told they owe a large sum in arrears of income tax. Overwhelmingly, they are pensioners, and equally overwhelmingly they declared all their income honestly, yet Revenue & Customs failed to collect the correct tax.
If this happens, tax officials have a time limit in which to put things right. This is 12 months from the end of the financial year in which the tax office received information about income. In your friend’s case that limit was April 5, 2010.
So why did officials think they could issue a demand two years later in 2012? The answer is that they claimed they knew nothing about your friend’s pension. However, Capita, the company that runs the Civil Service pension scheme, has told a different story. It says it told the Revenue about the pension on June 16, 2008, but received no instructions about how much tax to collect until April 2010.
I have to say that you did a remarkable job in protesting to the Revenue on behalf of your friend Mrs A on the other side of the world. As a result, the Revenue cancelled £1,295 of income tax that it had claimed was still due.
But this was not the end of the story. Under pressure, Mrs A had already paid £647 in monthly instalments and, amazingly, her tax office in Cardiff refused to return this, claiming that a tax demand could only be cancelled if the tax had not been paid. Once the money was handed over the Revenue would keep it, even if this was the wrong thing to do.
The taxman was behaving like a mugger who appears in court and blames his victim for handing over the cash. I asked officials at the Revenue’s head office to investigate and reconsider.
I am very pleased that they have told me: ‘We will repay the £647 to Mrs A. We are sorry for the distress and worry Mrs A has experienced and to acknowledge this and to say sorry we are sending her a further £75. This is not the level of service we aim to provide and we will work hard to provide a better service in the future.’
And in a final surprise development, Revenue staff double-checked your friend’s tax deductions for the two years from 2010 to 2012. They were also wrong and she will now be getting a further refund of £130.