The firm's analysis of tax codes sent to clients revealed that around 37% would have resulted in people paying the incorrect amount of tax.
Whilst it is up to the individual taxpayer to check his/her tax code and statement, human nature and the fact that most people are clueless about how the tax system works means that many people take their tax codes and statements at face value. This in turn results in over/underpayments of tax.
Roy Maugham, Partner at UHY Hacker Young's London office, said:
“Mistakes most frequently occur when someone has several sources of income, for example income from an investment as well as a salary and benefits from their employer, or where they have received a large one-off sum such as a dividend payment.One UHY Hacker Young office saw errors for 20 different taxpayers in just one week relating to benefits provided by employers, such as company cars and private health cover (usually set out on a P11D form).
HMRC really needs to make more of an effort to eliminate these errors as generally people trust its calculations and assume that they are paying the correct amount of tax.
If taxpayers do spot a mistake, it is now an even bigger headache to sort out because HMRC has made it harder to challenge unfair tax bills.”
In most of these cases the code sent by HMRC completely omitted to account for the tax due on the benefits.
The lesson being, check your tax code and tax bill!
Tax does have to be taxing.
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