‘Human error’ blamed for PAYE penalties

HM Revenue & Customs said that of 202,000 penalty notices issued to
businesses for failing to send in their PAYE end of year returns on time, as
many as 6% of notices have been issued incorrectly.

The taxman has blamed human error rather than an unknown IT systems fault.
‘We are very sorry for any inconvenience that this problem may have caused,’
HMRC said in a statement.

ICAEW tax faculty chairman Paul Aplin welcomed the apology, but said it was
the ‘latest in a series of problems’ dogging PAYE online.

‘Whatever the percentage it isn’t a comfort. They’ve done a good job on
self-assessment online filing and must pay the same attention to PAYE, it’s
causing huge frustration,’ said Aplin.

The issue arose as the taxman faced the Public Accounts Committee yesterday
over its performance in collecting PAYE tax for 2006-07, with NAO comptroller
general Sir John Bourn stating that the department required a ‘fundamental
change’ in its computer systems.

The taxman faced a similar problem for PAYE 2004-05, when 10,000 penalties
were issued incorrectly.

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