HM Revenue & Customs' (HMRC) rejection of requests to have tax credit overpayments written off even though it was responsible for the errors is a 'scandal', a tax body has claimed.
It was revealed last month that the Revenue has dismissed the requests of two-thirds of families to keep overpayments because they occurred as a result of mistakes by the government department.
It is believed the rejections occurred due to HMRC's decision to reintroduce its 'reasonableness test' when assessing overpayments. Under the test, overpayments are only written off if claimants can demonstrate that HMRC was to be blame and it was reasonable for the claimant to have believed their payments were correct.
But the Low Incomes Tax Reform Group (LITRG) said the process is unfair and an independent review of the estimated 100,000 dismissed claims should take place.
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