Sabtu, 12 Mei 2012

Taxman tells 1.6 million people they owe average of £537

Taxman tells 1.6 million people they owe average of £537

By Sam Dunn

PUBLISHED: 04:47 EST, 12 May 2012 | UPDATED: 04:47 EST, 12 May 2012

Up to 1.6million pensioners and workers will be hit with an unexpected £537 tax bill next week.

Many who believed their tax affairs were in order now face having to make up the shortfall.

However, as many as 3.5million who paid too much tax will be sent a letter telling them they are due a rebate worth an average of £380.

Since May 1, officials at HM Revenue and Customs have been hammering 650,000 overdue filers with a £10-a-day fine

Since May 1, officials at HM Revenue and Customs have been hammering 650,000 overdue filers with a £10-a-day fine

All those being sent demands or rebates have their tax dealt with through the pay-as-you-earn (PAYE) system and have it deducted at source by their employer or pension provider.

At the end of every tax year, HM  Revenue Customs tries to ensure that everyone in the PAYE system has paid the correct tax.

This involves matching tax records from thousands of employers and  pension companies with the details of each individual.

Often those with more than one source of income, or who are entitled to benefits, are found to have paid too much or too little tax.

The elderly, in particular, can be caught out as they may have income from pensions, salary, investments, share dividends or rent from a property they own.

Around 85 per cent of people pay the correct amount of tax, HMRC says.

Many of those affected are likely to be pensioners with several sources of income who have been dragged into filling out complicated self-assessment forms (posed by model)

Many of those affected are likely to be pensioners with several sources of income who have been dragged into filling out complicated self-assessment forms

But next Thursday it will send out demands totalling £859million to those who paid too little between April 2011 and April 2012.

They will have their tax codes adjusted so that the money is clawed back throughout the 2012/2013 tax year.

Those who paid too much will be sent a cheque. Matching up tax records used to be a complicated task, as the UK had a dozen computer systems.

But in 2009 HMRC merged them into a new system costing £385million.

This soon showed that millions had paid the wrong amount of tax over a number of years.

The Government admitted that 5.8million underpaid or overpaid between 2008 and 2010. In 2010/2011, up to 4.7million of the UK’s 30.6million taxpayers may still have paid the wrong amount.

Elaine Clark, managing director of accountants Cheap Accounting, said: ‘Since millions will soon receive a very unpleasant letter, it has to be asked if our PAYE system is fit for purpose any more.

‘It utterly fails to reflect the way we  live today, with people having several streams of income.’

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

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My wife has just sent in a form claiming back tax from last year. Her company is using the same system this year as well. This means more work for the tax office and more delays. There are 20 others in her office that have to do the same thing. As for the tax refunds how many are linked to the job losses over the past few months?

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One of the reasons people overpay tax is that the IR believes everyone gets a pay rise, I received a reduced tax code queried it. They said that the IR assumes everyone gets a pay rise and therefore reduces your coding accordingly. When I pointed out I worked in the Public sector and had no pay rise but instead was getting a net pay CUT due to increased pension contributions they changed it. No wonder it took many calls to get through to them as 'All our operators are busy, please phone back' was what I was getting. In this day age it is immoral to act as everyone will get a pay rise.

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Phil Leeds ... I think you will find the comments are in relation to the present system not some nirvana promised by HMRC. The RTI system is only in pilot from April this year. It is a very small sample of volunteer companies , 10 I believe, one of which is HRMC itself. Full implementation is a completely different issue and has no publicly announced go live date. Successive governments have a lamentable track record with new IT systems. HMRC caused utter confusion when it took on board the NI system. Thousands of errors had to be corrected, I was one of its victims! I would really like HMRC to get its act together in relation to tax collection but I'm not holding my breath that RTI will be its saviour!

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So these cheques to be recieved are they from overpaying in the tax year 2012-2012?

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Elaine Clarke's quotes in the article are very surprising from an accountant....it may refelct the company she works for 'Cheap Accounting' and why she doesn't know the PAYE system is being updated to reflect the way we live today and different streams of income. It's called Real Time Information.....can I suggest she reads up about it...she might like to know what millions of others aleady know.

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