New tax errors could spoil Christmas for thousands

IN ADDITION TO Pay As You Earn (PAYE) errors affecting more than 5.7m people revealed earlier this year, accountants now say two more areas of systematic bungling by the taxman are coming to light which could ruin thousands of people’s Christmas.

Accountants say that clients are being asked to repay refunded tax payments from the taxman, The Telegraph reported.

But, as brown envelopes bearing this bad news begin to drop onto doormats across the country, HM Revenue & Customs (HMRC) insists this is just part of the way tax works – although it does apologise for mishandling online applications for refunds, the Telegraph said.

Richard Mannion, a director of accountants Smith & Williamson, told the Telegraph: “The first problem concerns HMRC asking for tax repayments to be sent back and the second relates to online requests sent by taxpayers under the self-assessment system which seem to have been lost by HMRC’s computer system.

“In short, it appears that the tax authorities did not include the employee benefits as shown on forms P11D when working out if people had paid the correct amount of tax for 2009/10 and so under-estimated individuals’ tax liabilities. Consequently thousands of people who got a refund just a short while ago could now get a tax demand to the tune of several hundred pounds or more.

“This couldn’t have come at a worse time, given that we are in the run-up to Christmas. Lots of people will have already spent this money – only to find they have to repay it.”

“The second issue concerns online requests for repayment or for the reduction of tax payments on account, sent by taxpayers to HMRC during the six weeks between October 1 and November 15 this year. It appears that any online requests for help of this type have been lost and not acted upon by HRMC.”



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