HMRC has bowed to pressure and taken down a website page which gave taxpayers incorrect information.
The Revenue was put under pressure by industry heavyweights for failing to remove a tool that gave incorrect information about how much individuals could save into their pension.
Former pensions minister Steve Webb said it was ‘beyond belief’ that HMRC allowed taxpayers to access incorrect information and did not remove the dodgy calculator even after it admitted the tool was flawed.
It is feared top-rate taxpayers could have lost out on thousands of pounds of pension tax relief by using the Allowance Calculator.
HMRC yesterday apologised and admitted to the website errors, but experts are baffled as to why it took so long for the Revenue to remedy the problem.
Mr Webb, now director of policy at Royal London, says: ‘It is beyond belief that HMRC would knowingly allowing taxpayers to get incorrect information from its website and to potentially make major financial decisions on the strength of the dodgy data.’
Currently, most taxpayers can contribute up to £40,000 a year into their pension and qualify for tax relief at their marginal income tax rate on the contributions.
But since the 2016/17 tax year, higher earners have had a significantly reduced contribution allowance of as little as £10,000 a year for those with the greatest incomes.
However, a rule that allows taxpayers to carry over their annual allowance for three years if they don’t use it means higher earners who haven’t used up their contribution allowance could potentially save £40,000 into their pension in a tax year.
Mr Webb warns that incorrect information on the HMRC site, which had overlooked this rule, may have caused people to stop savings into a pension when they didn’t need to.
Royal London heard from one customer who was told their pension contribution allowance was £10,000 when, actually, they could have contributed around £35,000.
Mr Webb says: ‘It is totally unacceptable for an official government website to continue to operate when contains blunders of this sort.’
Moneywise (our sister magazine) understands that HMRC finally removed the calculator last night, weeks after issues with the tool had first been flagged.
This article was orignally written by our sister publication Moneywise.
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