Saving Gateway Accounts Bill

Amendment 41 seeks to limit HMRC’s powers so that it would be able to recover sums that had been incorrectly paid as a result of its error or mistake only where the person from whom the sum is recovered has materially contributed to the error or mistake. It would prevent HMRC taking recovery action where one of its officers made a genuine mistake to which the person from whom recovery is being sought has not materially contributed. I can give a couple of hypothetical examples of where this might be the case; for instance, where a keying error means that a provider is reimbursed £11,000 rather than the £10,000 actually claimed, or where a computer error leads to a duplicate payment being issued in response to a claim. HMRC will have checks in place to ensure that such errors do not occur, but it would be unwise to rule out completely the possibility of mistakes being made. This amendment would prevent HMRC recovering money if they were. That would mean that any payment made in error by HMRC would effectively become a windfall at the taxpayers’ expense, from which the provider, using the examples I have quoted, would benefit, unless HMRC could show that the provider materially contributed to the error. HMRC payments under the scheme, including any made in error, will be made to an account provider, rather than directly to an individual. It is reasonable for any account provider to check the payments that they receive from HMRC under the scheme and to discuss any incorrect or unexpected payments from HMRC, rather than passing on an incorrect amount to an account holder. Where recovery of a sum paid by HMRC in error is appropriate therefore, it is most likely that this will be from the account provider that received the payment, rather than from any individual. However, in all cases in which an overpayment has been made, HMRC will consider the facts and circumstances of the particular case to assess whether it is appropriate to take recovery action. HMRC will, as part of this process, take into account the reason for the overpayment, including whether it was due to a mistake on the part of the Government or some other person. However, it is right that HMRC should be able to take action to recover public funds on behalf of the taxpayer in those cases where it judges it appropriate. In light of this explanation, I hope that the noble Baroness will withdraw the amendment.