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HMRC writes off tax repayments under £300

 

Around 900,000 people have had their tax repayment written off after HM Revenue and Customs (HMRC) announced that it will only pursue cases where individuals owe £300 or more.

 

It is believed that some 2.3 million people have underpaid income tax in the last two years due to errors in their Pay As You Earn (PAYE) tax code, with individuals owing an average of £1,428 each.

 

However, HMRC has raised the threshold for recouping tax from £50 to £300, meaning that only 1.4 million taxpayers will be chased for the money.

 

Meanwhile, those who owe between £300 and £2,000 could have up to three years in which to pay rather than the usual one year. The money would be reclaimed through amendments to taxpayers' PAYE codes.

 

Speaking in the House of Commons, Treasury minister David Gauke said: ‘In total the Exchequer is owed approximately £2 billion. Being left with the worst deficit in peacetime history means we simply cannot afford to write off all of these underpayments.

 

‘Of course in specific circumstances HMRC will consider writing off underpayments where it can be shown that HMRC was provided with all the information necessary – although I have to tell the House that from historic experience, this is unlikely to apply to many cases and we do not want to build up people's hopes unrealistically.’