David Gauke, a Treasury minister, revealed that nearly 10,000 people have had their tax debts wiped out after they were sent a tax demand from HMRC in September 2010.
HMRC experienced severe problems with the PAYE system which meant it got millions of tax bills wrong. It then sent tax demands to around 1.4 million people asking for a total of £3.8 billion in unpaid tax.
Accountants at the time advised those who had received a demand to apply to have the debt cancelled under the extra-statutory concession A19.
In order to use A19, certain criteria need to be fulfilled:
- HMRC must have delayed in using information they had on the applicant that was within its possession
- The arrears must be at least 12-months old
- The tax payer must hold a reasonable belief that their tax affairs were in good order
There is still time for anyone who received a tax demand from HMRC to apply for the concession. They are advised to send a letter to HMRC claiming ESC A19 and to mark this at the top of the letter.
Of the people who applied to have their tax debt cancelled, 23% have been successful. HMRC advises potential applicants to check if they qualify under A19 before applying to avoid disappointment if their application is rejected.
However, applicants are entitled to appeal HMRC's decision if it does not find in their favour.
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