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Has the self assessment tax system backfired?

A number of prominent tax experts in the City of London have stepped forward to suggest that UK taxpayers could potentially have overpaid by £7.2 billion over the last 14 years. However, there is concern that even if the estimated figure of £7.2 billion was confirmed, taxpayers may only receive funds overpaid during the last four years. A number of people are now suggesting that the self assessment tax system introduced to the UK in the 1995/96 tax year may be the main reason for the problems we have today.

More people have overpaid tax as opposed to those who have overpaid tax, through no fault of their own, due to a relatively low level of understanding with regards to expenditure which can be offset against taxable income. The problem for many people is the fact that there are numerous accountancy firms up and down the UK able to give advice on taxation so there's really no excuse for those who have filled in their self-assessment forms incorrectly. However, should the UK tax authorities be more lenient towards those who have made genuine errors?

Whatever happens in the aftermath of the ongoing taxation issues in the UK, there is no doubt that changes are afoot and we could even see top level management reshuffled in the short to medium term.

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