HMRC tax statement errors affect thousands

HM Revenue and Customs (HMRC) has revealed it is distributing second tax statements to thousands of taxpayers after their initial estimates for the year to April 2014 were miscalculated.

Over five million taxpayers were given their initial estimate because they paid the incorrect amount of tax in the year to April.

However, HMRC said errors emerged in the calculation process, citing incomplete information from employers as the main cause for confusion.

A spokesman for HMRC, said: "The majority of the errors have happened because an employer failed to make a final payment statement for the 2013-14 tax year meaning our records were incomplete despite reminders that these submissions had to be made."

Workers who have multiple income streams or moved jobs during the tax year may also pay the wrong amount of tax as a result. Each year, HMRC staff are tasked with cross-checking the amount paid with information from its own records, from self-assessment forms and from PAYE information given by employers.

Subsequently, new statements may show that more tax will need to be collected during the following year in interest-free monthly instalments, or that the individual would receive a rebate cheque for overpaying. The typical amount involved is around £200, according to an HMRC spokesman.

In the case of taxpayers who may have already received a rebate earlier in the year and spent it, HMRC has said it will "push the boat out" to assist those who may have received their rebate in error.

Jason Piper, technical manager of tax and business law at the ACCA, said: "Yet again, we are seeing errors in the operation of PAYE, and HMRC must learn the lessons from earlier problems and be transparent and accountable this time around.

"Public patience is wearing thin with government IT failures, and one like this which hits so close to home for taxpayers the length of the country, is bad news for a department trying to extend the reach of its powers into every aspect of our collective financial lives based on the power of its computer systems."

Date published 16 Oct 2014 | Last updated 16 Oct 2014