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David Cameron: Cutting taxes is a moral duty

David Cameron said he feels a 'moral duty' to cut taxes Credit: PA

David Cameron said he feels a "moral duty" to cut taxes and claimed the average worker will save £3,800 by 2020 under a future Conservative government.

Writing in The Times, the Prime Minister issued a reminder of his promise of tax cuts worth £7.2 billion to 30 million voters.

He has pledged to raise the threshold at which workers pay the higher 40p rate of income tax to £50,000, while increasing the personal allowance below which no tax is payable to £12,500.

It is morally right that the rich pay their fair share in tax; and right that those who are able to contribute to our public services and safety nets do so.

– David Cameron

Taking aim at Labour spending he said "we must be mindful of who picks up the bill" but the Opposition accused him of failing to explain how reductions would be paid for and ignoring the impact of benefit cuts on low-paid families.

Shadow Treasury chief secretary Chris Leslie said: "David Cameron will be judged on his actions, not his words. He's raised taxes 24 times.

"While millionaires have been given a huge tax cut, ordinary working people are paying more because he raised VAT and cut tax credits."

Vehicle tax will be enforced 'from electronic records'

A spokesman for the Driver and Vehicle Licensing Agency has said that changes to the rules of tax discs will not affect the agency's ability to enforce the law:

There is absolutely no basis to these figures and it is nonsense to suggest that getting rid of the tax disc will lead to an increase in vehicle tax evasion.

We have a proven track record in making vehicle tax easy to pay but hard to avoid, with over 99% of all vehicles taxed. Given the systems now in place we take enforcement action direct from our electronic records rather than requiring a tax disc.

– spokesman, Driver and Vehicle Licensing Agency

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'Clear concern' among motorists over tax disc changes

The chief engineer for RAC has said that a survey shows there is "clearly concern among motorists about forthcoming changes to tax disc rules:

There is clearly concern among motorists over the issue of enforcement. Most of the changes make sense and will benefit the motorist, but too many motorists are unaware of the detail.

The big question has to be whether enforcement using only cameras and automatic number plate recognition will be sufficiently effective.

– David Bizley, RAC chief engineer

Poll: 63% of drivers expect rise in number of untaxed cars

An RAC survey of more than 2,000 drivers showed that almost two-thirds of respondents believe changes to the rules on tax discs would prompt more tax evasion.

  • 36% were unaware of the scrapping of the paper disc
  • 47% did not know when the change was due to take effect
  • 63% feared there would be a rise in the number of untaxed cars on the road
  • 44% reckoned the change would actually encourage people to break the law

(Source: RAC)

Tax disc changes 'could cost economy £167m per year'

Next month's ending of the need to display a car tax disc could lead to tax evasion costing the economy £167 million a year, according to the RAC.

Motorists will not need to display tax discs from October Credit: Stefan Rousseau/PA Wire

It said it feared that the number of tax-dodgers could equal the number who try to avoid paying motor insurance.

RAC chief engineer David Bizley said: "We could be looking at around £167 million of lost revenues to the Treasury, far exceeding the £10 million that will be saved by no longer having to print tax discs and post them to vehicle owners."

From October 1, motorists will no longer need to display a tax disc on their vehicle windscreen. They will still need to pay their vehicle excise duty car tax, with records being monitored electronically.

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Millions face paying back HMRC after tax errors

Millions of people face having to hand money back to HMRC after errors meant they ended up paying the wrong amount of tax on their earnings.

It is estimated that 5.5 million people have paid the wrong amount of tax, with 3.5 million thought to have paid too little and the remaining 2 million having overpaid, meaning they can claim a refund.

The mistakes can occur due to a change in personal circumstances, such as if a person moves jobs or starts receiving benefits.

Millions of people face having to repay money to HMRC because of errors calculating their tax. Credit: Gareth Fuller/PA Wire

According to tax officials cited by the Daily Telegraph, the average size of the error is about £300.

This is despite the introduction of a new £270 million 'Real Time Payments' scheme designed to make the tax system more accurate by letting people update their information on a weekly or monthly basis.

HMRC taking a 'computer says yes' approach to tax

Mike Down, of accountancy firm Baker Tilly, said the HM Revenue & Customs (HMRC) should be checking tax returns to see whether individuals had already explained their circumstances.

He told the Daily Telegraph that The Revenue is "adopting a computer says yes approach, rather than simply checking the tax returns".

One case involved an elderly widow whose effective tax rate was low because she was giving more than half her income to charity.

More: HMRC accused of 'bully boy tactics'

HMRC forms a 'trial to help people with mistakes'

The HM Revenue & Customs who have been accused of "bully boy tactics" for sending high earners letters ask why they are not paying more tax, have responded to the claims.

An HMRC spokeswoman said:

We are issuing 1,000 letters to taxpayers with an income of £150,000 or more who have an effective rate of tax of 22% or less.

If a taxpayer is content that their return is accurate then they do not need to do anything.

This is part of a trial to help individuals identify any mistakes they may have made on their Self Assessment return.

Anyone who needs help is welcome to get in touch with us.

– HMRC

HMRC accused of 'bully boy tactics' over tax letters

The HM Revenue & Customs has been accused of "bully boy tactics" for sending high earners letters asking why they are not paying more tax.

Around 1,000 letters have been issued to people who have an income of more than £150,000 but are paying less than 22% in tax.

HM Revenue & Customs forms were sent to everyone earning over £150,000. Credit: Rui Vieira/PA Wire

The letters state: "We can see from your Self Assessment tax return... that your effective rate of tax is lower than the average for people in your income bracket.

"There may be reasons why your effective rate of tax is correct. But it could mean that there is something wrong with your self assessment."

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