Hmrc Errors Highlighted By The Bbc

By Webbie

Back in October we advised you that HMRC had been making errors with peoples tax codes and 3 months later the BBC have confirmed this publically.

The CIOT has called on the Revenue to launch a publicity campaign to alert taxpayers to the potential problem.

“Most people on PAYE are used to assuming that what the taxman sends them is correct,” said Andrew Hubbard of the Chartered Institute of Taxation (CIOT).

“But this year, many of them are being given wrong information, and unless they spot it and tell HMRC, their employer will receive the wrong information too.

“They could get a nasty shock when they open their April pay packet and see it is as much as a hundred pounds lighter than they are expecting,” he added.

It is not clear how many incorrect tax codes have been sent out, or may be distributed in the coming weeks.

The CIOT said the scale of the problem might be indicated by the fact that this year about 25 million coding notices are being distributed, which is about twice last year’s number.

The Revenue explained that the increase was a natural feature of the new system.

“It creates a single record for customers for the first time, and this, together with increased automation compared to previous years, is resulting in many more people having more accurate codes than before,” the spokesman said.

The problem appears to lie with a new computer system designed to process the collection of income tax via the PAYE system, along with national insurance contributions.

“The new system is improving the accuracy of the PAYE so that more people than ever before are correctly taxed,” said the HMRC spokesman.

“We have until April to correct the coding notices that are genuinely wrong,” it added.

However the CIOT said the system’s database was failing to distinguish between current jobs and old ones, leading to tax codes being calculated on the assumption that someone has more than one job.

In a few cases the Revenue computer system has removed the personal allowance on the assumption that the person’s income will be higher than £100,000.

Earners above this level will lose their personal allowance this coming tax year, in a measure first announced by the Chancellor in the 2008 pre-budget report.

Any problems or concerns then please contact Lynne Brooks on 0151 702 5604.

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