£9.6bn in tax expected to be repaid due to successful legal cases over bills

A further £9.5 billion in tax is being refunded because of legal cases in which people triumphantly demanded their bills are reexamined, the public spending watchdog has found.

The National Audit Office (NAO) announced the sharp rise in its statement on the accounts of HM Revenue and Customs (HMRC).

HMRC is expecting to have to refund £9.6 billion due to such legal suits for the period 2016-2017, a big jump from the £5.9 billion paid back in 2015-2016.

Some £1.8 billion have already been returned for the year 2016-2017, the publication said.

The NAO stated that returns depend on individual court rulings where taxpayers have argued the analysis of legislation.

HMRC also revealed that separate contingent liabilities for legal appeals where it holds that it is likely that it will be obligated to repay tax dropped at the same time.

Contingent liabilities plunged by 61.9% to £18.7 billion at the end of the third month year; this was a decrease from £49.1 billion in 2015 to 2016.

The report asserted: “This is due to revisions of estimates for cases currently in litigation, reduced likelihood of payment for certain cases, and cessation of a litigation action.”