HMRC error leads to outrage

Tax Bill

HMRC have been the focus of strong criticism following the news that they have over-charged around 15 million UK taxpayers, with pensioners and British expats amongst those stung.

A series of errors stemming from the installation of a new computer system at HMRC HQ has led to a massive amount of UK taxpayers paying more tax than they actually owed, with HMRC pocketing £238 million in extra funds.

The news has been met with outrage throughout the financial world, Rob Durrant-Walker, of accountants UHY Hacker Young told The Telegraph: “We have seen a steady increase in PAYE errors over the past year. For the amount of tax collected in error through PAYE to jump by 148 percent in one year is simply unacceptable. Taxpayers can overpay for a considerable period of time before they notice they are paying too much. On the other hand, if they pay too little this can create financial problems in later years when HMRC collects what can be a hefty tax bill.”

Sadly pensioners already struggling on small pensions are some of the citizens who have been hit the hardest by the tax-code fiasco. “We have dealt with large numbers of pensioners on modest incomes who are owed money by HMRC due to processing errors,” added Mr Durrant-Walker.

British expats living abroad may also find that they have paid excessive tax, however expats could find that recouping the money is more difficult for them. Angela Beech of the accountants Blick Rothenberg said: “When we approached the Revenue on behalf of a former client who has not lived in the UK for over 15 years, we were told that the code number could not be amended without proof of his residency in the other country. The system is over-complicated and finds it difficult to get things right when multiple employments or pensions are involved.”

With the entire furore understandably casting a negative light over the taxman, a spokesman for HMRC was quick to issue a statement: “We don't regard this as acceptable, so last year we introduced a new computer system. The new system raises the bar in terms of data quality and will in the medium term significantly improve overall accuracy, reducing both under and overpayments. Our contact centres are able to quickly correct inaccuracies, when contacted by the taxpayer, in part because the new system has for the first time created a single taxpayer record which the contact centre operator can access and amend”.