Five and a half million people paid wrong tax in 2012/13
The taxman says three and a half million people are due a refund, but two million will have to fork out for underpaid tax.
HMRC has announced that more than five million people paid the wrong amount of tax in the 2012/13 financial year.
Three and a half million will enjoy a tax refund, but two million will have to pay an average of between £400 and £500 as they’ve underpaid.
The taxman says 85% of taxpayers paid the correct amount of tax via the Pay As You Earn (PAYE) system.
Letters will be sent out to affected taxpayers between now and October, with the first batch going out over the next few days.
What happens if you've underpaid
If you’ve underpaid by less than £3,000, the ‘reconciliation’ (as HMRC calls it) will be collected over the course of the 2014/15 tax year, which begins next April, via your pay.
If you’ve underpaid by more than £3,000, you can pay some or all of the bill now. If you pay a part payment to bring the amount you owe down to less than £3,000, it can then be collected via your pay in 2014/15.
If you can’t afford to pay the sum you owe, you should contact HMRC and it can potentially allow you to spread the cost over a longer period.
What happens if you've overpaid
If you've overpaid, you'll be sent a cheque in the post. But you can make a claim now if you think you're owed money. Read How to get a tax refund for tips on how to do this.
Will tax errors soon be a thing of the past?
This latest string of incorrect tax bills will once again raise questions about the reliability of HMRC’s systems.
If you want to check you’re on the right tax code, have a read of How to make sure you’re on the right tax code.
And watch out for tax refund scams that will no doubt be doing the rounds off the back of this news. Read Watch out for these HMRC tax refund scams for tips on what to be aware of.
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Comments
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Bit of a non-story. Isn't this the way PAYE was designed to work? They take approximately 1/12th of your likely tax due and at the end of the year they calculate the actual and carry the difference forward to your tax code the following year. The real difference is that we didn't have this deluge of data, often spun as negative stories, nor a large number of people with the time and inclination to spend hours on internet comments boards whining about the Government.
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Check your tax code. I had a retail job for several years where I was supplied with a uniform .If you let the Inland Revenue know then your tax code will be adjusted favourably . I think you can backdate your claim. Maybe worth asking if your H.R dept will do it for you.
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Hmmmmm, in view of the above, perhaps I will keep my well insulated bungalow here and just take holidays in France when I get totally fed up with the weather (like now). I have filled in a tax return every year since about 1986, which means that my tax position is effectively checked and recalculated every year. I would feel very wary of being entirely dependent on the PAYE sausage machine. HMRC have always dealt with my tax affairs efficiently, but woe betide you if you make a mistake. Fines and interest are applied immediately. So, double and triple check your figures before submitting. Here's a good tip if you think that the payments on account are too high. Fill in your tax return as soon as possible, Then your July payment will be reduced accordingly. If you apply for payments on account to be reduced and get it wrong, interest is applied. So I did not fancy doing that.
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01 June 2013