Lord Eatwell
Main Page: Lord Eatwell (Labour - Life peer)
Lord Sassoon
The amount of tax which is now due under this reconciliation exercise is some £2 billion from 1.4 million taxpayers, although, as I said, all amounts under £300 individually, which is for about 900,000 taxpayers, will be written off.
Lord Eatwell
My Lords, the House will agree that underlying the interesting question from the noble Lord, Lord Higgins, is the notion that HMRC should be fair. It seems to be very unfair that the rate of interest charged on unpaid balances is six times greater than the rate of interest provided on repayments when the Revenue for some reason or other has made a mistake. Does the noble Lord believe that HMRC should be fair? Given the extensive misuse of that word on the Benches opposite, will he define for us what fairness in taxation means?
Lord Sassoon
My Lords, the previous Government brought in the current interest rate regime within the past year, and after extensive consultation, on the basis that late payments are calculated at 2.5 per cent over the bank rate and repayments are 1 per cent less than the bank rate, subject to a minimum of 0.5 per cent. This regime is similar to that of other countries ranging from Australia to the United States. Indeed, of the six or eight countries surveyed, Japan is the only one that does not apply differential rates to payments and repayments. So, in that sense, the system does reflect a due degree of fairness.