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Tax (Repayment)

Volume 130: debated on Wednesday 30 March 1988

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To ask the Chancellor of the Exchequer whether there is to be any change in the way that the Inland Revenue handles claims for repayment of tax by individuals during the course of a tax year.

Multiple of average earnings
HalfTwo-thirdsOneFiveTen
(a)(b)(a)(b)(a)(b)(a)(b)(a)(b)
Single
1978–7923·5100·027·5100·031·5100·052·2100·067·5100·0
1979–8022·9102·526·3103·429·7100·442·8121·651·4151·8
1980–8124·7103·627·7104·930·7106·444·3122·652·1154·7

Individuals who are not liable to tax can claim payment of the tax credit attached to dividends; they can also claim repayment of tax deducted from certain interest and other payments. Whether or not an individual is liable to tax cannot be finally settled until the end of the tax year when his or her actual income and personal allowances and reliefs for the year are known.Nevertheless the Inland Revenue's practice has been to allow individuals to claim provisional repayment by instalments during the course of a tax year rather than waiting until the end of the year. In very many cases these involve repayment of comparatively small amounts of tax at a disproportionate cost.With effect from 6 April 1989, therefore, there will be a change in the Inland Revenue's practice. With my approval, after that date the Inland Revenue will repay tax claimed during the course of the tax year only when the amount of tax involved exceeds a limit of £50. Where the tax repayable is less than this, the Inland Revenue will not process the claims but instead will be asking individuals to wait until either the amount exceeds the £50 limit or the end of the tax year, whichever is the earliest, before claiming repayment. This change in practice may affect the timing of repayments, but it will not affect the amount repaid.