Errors by the taxman increase by 148 per cent – from today’s times

 In HMRC Investigation

The mistakes are a result of the issuing of inaccurate tax codes, which are being caused by a glitch in HMRC’s computer system

Errors by the taxman have risen by a “shocking” 148 per cent during the past year, leading taxpayers to overpay by millions of pounds, figures from the National Audit Office show.

Revenue & Customs collected £238 million too much tax through the PAYE system in the year 2009/10 compared with £96 million falsely collected in 2008/09. The mistakes are a result of the issuing of inaccurate tax codes. The errors are being caused by a glitch in HMRC’s computer system, designed to make PAYE processing faster and more accurate.

Rob Durrant-Walker, tax manager at UHY Hacker Young, the accountants, says: “Even though HMRC’s new system should lead to more accurate codes in future that can cope with increased job mobility, these figures are quite shocking.”

“We have seen a steady increase in PAYE errors over the past year. For the amount of tax collected in error through PAYE to jump 148 per cent in one year is simply unacceptable.”

These latest figures come after Times Money exposed chaotic management of Continued from page 63 tax collection at HMRC, leaving millions of taxpayers out of pocket. The problems highlighted by accountancy firms included delays refunding overpaid tax, unanswered telephone calls to helplines and blunders in the calculation of tax owed.

As well as the disorderly introduction of the new computer system, the chaos has been blamed on unnecessary security checks and job cuts.

The Chartered Institute of Taxation has given warning that further job cuts could create more problems.

UHY Hacker Young says that the HMRC PAYE problems are having a big impact on its clients. Pensioners are among those worst affected by the errors as they often have multiple sources of income.

Mr Durrant-Walker says: “We have dealt with large numbers of pensioners on modest incomes who are owed money by HMRC due to processing errors. HMRC has all the information it needs in its records so really has no excuse for getting it wrong.”

Another problem, he adds, is that more and more of HMRC is transferring work between offices.

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