19/10/2011

Millions Affected By Tax Blunder

Millions of UK tax payers will be told they have paid the wrong amount of tax, with some being handed a £400 rebate while others will be hit by £600 in back payments.

Around six million are expected to receive the tax rebates, while one million others will be told they have underpaid and will be asked to pay their missing tax contribution in stages.

Her Majesty's Revenue and Customs (HMRC) said it carried out an annual check to make sure the amount of tax and National Insurance deducted by employers matched its records.

However a new computer system, which HMRC described as still "bedding in", identified the discrepancies.

An HMRC spokesman said: "Money that is owed going back many years is now going to be automatically paid back as we get the tax system up to scratch.

"We are getting cases that were left unreconciled [sic] up to date as quickly as possible. Anyone owed money will be paid back with interest without the need to contact us.

Last year, HMRC revealed that 4.3 million people were due refunds for overpayments while some 1.4 million owed the taxman after paying too little.

Around one million people will receive letters in the next few months notifying them that they have paid too little or to much tax.

Those affected will be able to pay the amount back in stages if necessary, by either having their tax code adjusted or coming to an agreement with the Inland Revenue.

(DW/BMcC)

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