Could you be one of the six million people to have overpaid or underpaid tax?
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7 September 2010
| |If you are you will find out between now and Christmas.
The errors have arisen through the Pay As You Earn (PAYE) system. With about 1.4 million people owing an average of £1,500 each. And another 4.3 million people due an average of £400 each.
HMRC has started sending letters to the people it has identified as having overpaid or underpaid income tax. The letters will include a calculation of the person’s total income and allowances and will say whether the person has paid too much or too little tax.
Who is most likely to be affected?
The errors relate to the tax years 2008/09 and 2009/10. They are most likely to have arisen where an individual has changed jobs, has more than one job at the same time, or their employer has used the wrong tax code.
What should you do if you get a letter?
If you get a letter you should check the details. If the details are correct you and you are due a repayment you need to do no more than keep the letter in a safe place.
- If the details are correct and you have underpaid do not despair. There is a chance you will not have to pay it. As a starting point you will need to look back at your records to find out when you provided HMRC with the information needed to give you the right tax code. If you need help, contact us via the link below.
- Of course if you are a Hazlewoods client please forward any letter to us.
Beware suspicious emails
Given the news coverage this story has received, it is likely that fraudsters will use it as an opportunity to try and obtain personal details of unwary individuals. The most likely way they will do this is by sending emails claiming to be from HMRC. They may suggest you are due a repayment and ask you to complete an online form to enable you to get the repayment. If you get any such emails do not open them, instead email them to email@example.com for them to investigate. If you are one of the nearly six million people affected you will be sent a letter (not an email or a telephone call).
What to do next?
If you get a letter, read it, check the information and if you need help contact us by clicking here:
The Low Incomes Tax Reform Group has prepared a useful guide to this topic.