psl
07-06-07, 10:50 AM
Thousands Have Paid The Wrong Tax
Updated: 06:29, Friday July 06, 2007
More than one million people have paid the wrong tax due to mistakes made by HM Revenue & Customs (HMRC), according to a new report.
The National Audit Office said £157m of tax was overpaid during 2006/2007 due to processing errors, with vulnerable people such as pensioners disproportionately affected.
At the same time around £125m of tax was underpaid, the spending watchdog said.
It blamed the errors on the increased complexity of processing income tax due to people changing jobs more often, as well as the need to process certain cases manually.
But it added that the errors had a much wider impact on people than simply the extra tax they had to pay, as they led to anxiety, taxpayers having to put time and effort into putting matters right and additional costs for HMRC.
The report comes as HMRC said it wanted the power to take cash directly from the bank accounts of people who did not pay their tax bills.
It also asked if it should be allowed to demand cash from the sale of the land or property of non-payers.
The NAO office found that HMRC accurately calculated the amount of income tax people had to pay in around 95% of cases.
Overall, nearly 1.5 million people were over or undercharged tax during the past tax year, but once some errors had been corrected after being brought to HMRC's attention by taxpayers, around one million people were charged the wrong amount.
Just over 500,000 people were undercharged tax, underpaying by an average of £250 each, while more than 540,000 were overcharged, paying an average of £290 too much, although in some cases errors led to people receiving unexpected demands for much larger amounts.
The report found that people with complicated affairs, such as pensioners and people with several jobs or sources of income, were most likely to suffer from processing errors.
Updated: 06:29, Friday July 06, 2007
More than one million people have paid the wrong tax due to mistakes made by HM Revenue & Customs (HMRC), according to a new report.
The National Audit Office said £157m of tax was overpaid during 2006/2007 due to processing errors, with vulnerable people such as pensioners disproportionately affected.
At the same time around £125m of tax was underpaid, the spending watchdog said.
It blamed the errors on the increased complexity of processing income tax due to people changing jobs more often, as well as the need to process certain cases manually.
But it added that the errors had a much wider impact on people than simply the extra tax they had to pay, as they led to anxiety, taxpayers having to put time and effort into putting matters right and additional costs for HMRC.
The report comes as HMRC said it wanted the power to take cash directly from the bank accounts of people who did not pay their tax bills.
It also asked if it should be allowed to demand cash from the sale of the land or property of non-payers.
The NAO office found that HMRC accurately calculated the amount of income tax people had to pay in around 95% of cases.
Overall, nearly 1.5 million people were over or undercharged tax during the past tax year, but once some errors had been corrected after being brought to HMRC's attention by taxpayers, around one million people were charged the wrong amount.
Just over 500,000 people were undercharged tax, underpaying by an average of £250 each, while more than 540,000 were overcharged, paying an average of £290 too much, although in some cases errors led to people receiving unexpected demands for much larger amounts.
The report found that people with complicated affairs, such as pensioners and people with several jobs or sources of income, were most likely to suffer from processing errors.