| HM Revenue & Customs (HMRC)
has issued guidance for up to 1.4 million
taxpayers who have underpaid PAYE due to
incorrect tax codes. It has been widely
reported that around 1.4 million people
had underpaid £2 billion through PAYE, an
average of £1,500 each. Around 4.3 million
people will receive a rebate from £1.8
billion in overpayments between April 2008
and April 2010.
The problems have arisen after HM
Revenue & Customs (HMRC) implemented its
new National Insurance and PAYE Service,
allowing it for the first time to combine
its records of individuals' national
insurance contributions with their income
tax paid through PAYE. A computerised
system introduced in 2009 has allowed more
discrepancies to be identified.
People who have underpaid tax of less
than £2,000 will generally be expected to
pay what they owe via extra tax deductions
via PAYE from April 2011 onwards. Those
owing larger sums will need to make
arrangements to pay the amount
outstanding.
HMRC chief executive Dame Lesley
Strathie has confirmed that people who owe
more than £2,000 in tax would not have to
pay interest if the tax authority gave
them extra time to pay.
Before the concession, people had three
months to pay up after which point they
would be charged interest on the money
owed.
Guidance issued by HMRC also says: “In
cases of genuine hardship HMRC will allow
payments to be spread across a period of
three years.”
However, the guidance says that
following media reports that underpayments
of tax could be written off, “HMRC can
consider writing off the underpayment only
in certain circumstances”.
People who have overpaid will receive a
full refund, HMRC says.
LINKS:
HMRC guidance
BBC news |
