Over the weekend the media reported that nearly six million people are to be told that they have paid the wrong amount of tax.
HMRC stated, at the time, that they will be demanding approximately £2BN back from certain taxpayers.
The story over the weekend was that £2BN has been underpaid through PAYE over the past two years, this negatively impacts 1.4 million taxpayers.
However, at the weekend it also appeared that approximately 4.3 million people had paid too much tax and will receive an average rebate of £418.
The errors were identified by the new computer system that found widespread underpayments by employers through the PAYE system.
However, since the story first broke there has been a revision in the number of taxpayers affected.
The Guardian now reports that over 10 million people may be in line for a tax rebate due to errors in HMRC's tax code system.
It seems that historic errors may have resulted in a further 5.8 million people (on top of the 4.3 million) overpaying income tax before March 2008.
HMRC seemingly has has 18.2 million "open" cases of incorrect tax payments pre-dating March 2008.
Spiffing!
Tax does have to be taxing.
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Maybe it is time that HMRC staff took some classes in counting.
ReplyDeleteThe errors were identified by the new computer system that found widespread underpayments by employers through the PAYE system.
ReplyDeleteThe trouble here is wether or not the new PAYE still has people listed as employed in jobs they left years ago. There would obviously be an underpayment if the tax was not actually due. The question is has anybody actually checked the system now or are we still being subjected to an untested PAYE system?
luckily its nice for the press that every accountant seems to have forgotten how they earn their money. every year people are underpaid or overpaid as they fail or their employer fails to tell hmrc of any changes in their circumstances. no need to be upset they pay what they are due. dont be hypoctrits
ReplyDeleteThis story is almost 100% media hysteria. The PAYE system has been in place how long? This happens every year. The only difference here is that two years are being run at once because the assessments were not carried out last year.
ReplyDeleteMaybe the people printing this stuff as news would like us all to be under self assessment. Then with no tax deducted at source we would all be under paid at the end of each tax year. And have to pay accountants to help with our Returns.
00:21 maybe on to something.
ReplyDeleteSince I went self employed and started doing self assessment I have had no problems with my tax affairs at all, apart from the odd glich with the online submission system.
So is this because I do the work and no HMRC staff are actually involved?
00:34 - What you have to take into account is that SA is done after the end of the year so all figures are held and your tax is therefore easy to calculate.
ReplyDeleteAs a PAYE employee I cannot at this moment in time tell HMRC what my EoY income is going to be, what the total of my employment benefits will be or what my investment income will be. This means they are working on estimates which will likely be wrong once the year ends. This is not an issue with HMRC it is with the PAYE system which has been with us 76 years.
Some errors will be due to HMRC, some to employers and some due to individuals.
This story is old news, there are ALWAYS under and overpayments and will continue until a 'Real-Time' PAYE system exists (which you all seem to dismiss)
I think the reason for most people dismissing a 'Real-Time' PAYE system is based on HMRC's track record of designing and implementing IT systems.
ReplyDeleteHas anybody got odds from the bookies on the letters being sent out having the wrong details printed with the wrong names etc?
ReplyDeleteWhat's the real reason for all of this? Incompetence? Stupidity? Maybe a little of both but, more importantly, the major reason is budgetary cuts.
ReplyDeleteHMRC simply doesn't have the money to properly implement fully tested systems. Everything has to be done on the cheap. You, the taxpayers, can thank Gordon Brown for that.
Now the ConDem coalition have introduced similar swingeing cuts and are eyeing up even further cuts to HMRC's budget in the range of 25-40%, this will only get an awful lot worse.
You will be told that someone in HMRC has failed.
You will be told that the reason for this disaster is poor management.
You will be told that lazy, incompetent staff are to blame.
The real answer is far simpler and you only need to look at No. 10 Downing Street to find it - HMRC is being cut back for short term financial gain, to the cost of long term financial stability.
The government has already made enormous efforts to demonise civil servants as idle, overpaid, under-worked office monkeys. Now watch as the essential services crumble and, suddenly, people realise that an awful lot of civil servants are actually there to do an important job.
zzzzzzzzzzzzzzzzzzzzzzzzzzz
ReplyDelete19:03...
ReplyDeleteTotally agree with you!!!
Budgetary cuts my arse, the new system was way over budget and the bill will still get paid. So what cuts affected it?
ReplyDeleteSo what cuts affected it?
ReplyDeleteThe cuts in staff who previously did this work without major news stories every year?
Or "HMRC simply doesn't have the money to properly implement fully tested systems. Everything has to be done on the cheap."
That just leaves the incompetent or stupid options then because testing should have been part of the project.
ReplyDeleteThe problem with PAYE was incompetence at the Project Management level and a lack of managerial competence in "Senior Management" to understand project management discipline. There was supposed to be an "Model Office" in Manchester which failed to identify that Married Couples Allowance, Benefits in Kind and Age related Allowances could not be calculated properly. Thats why there was no reconciliation last year. We are close to yet another software release coming. The future plans are to link NPS with SA for heavens sakes. If the data has no integrity.. you can imagine what the outcome will be.
ReplyDelete