TaxAdministrationError forces HMRC to recoup billions on pension income

Error forces HMRC to recoup billions on pension income

HMRC is preparing to reclaim billions in tax from up to 420,000 pensioners to correct PAYE errors from 1983

HM Revenue &
Customs
(HMRC) has been failing to collect all the tax due on pension income
since 1983 because of errors it made in applying PAYE regulations on pension
income, warns network
UHY Hacker
Young
.

According to the latest
National Audit Office
report on HMRC’s accounts, HMRC is preparing to reclaim tax from an estimated
420,000 pensioners, resulting in up to £135m in lost tax revenue every year for
the past 25 years, the Birmingham Post reports.

UHY Hacker Young notes HMRC will not issue pensioners with correct PAYE codes
until 2009-10 and although HMRC has agreed to waiver unpaid tax for the years up
to 2007-08, it will begin reclaiming unpaid tax for 2008-09 and 2009-10 during
2010-11.

‘The pensioners hardest hit by HMRC’s mistakes will be those on low incomes
who will face a bill for up to two years worth of unpaid tax on top of higher
tax bills,’ Malcolm Winston, UHY Hacker Young partner, said.

Further reading:

Read
the Birmingham Post story

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