HMRC’s PAYE error costs taxpayers millions

HMRC is not particularly popular at the moment, having undercharged an estimated 3.5 million Britons in Pay As You Earn (PAYE) taxes last year. Now, the notorious PAYE debacle of 2013 has finally caught up to them, and it’s only a matter of time before HMRC takes back the tax they’re still owed.

HMRC's PAYE error costs taxpayers millions

HMRC has cost the average taxpayer around £850. Captain Picard is not impressed.

Even though the mistake has cost taxpayers millions of Pounds, an HMRC spokesperson has resolutely defended the existing set-up: “Most people pay the right tax throughout the year, but there will always be a small percentage of the 41 million people in PAYE who have underpayments or overpayments at year end.”

According to John Dunn, Tax Refund Manager at 1st Contact Visas, this situation is not new around the end of the tax year, and is even inevitable considering the vast number of taxpayers in the system. The issue of overpayment is common, says Dunn, “but the bigger problem is how quickly it is resolved, and how quickly those that overpaid can get their funds back.”

Dunn continues: “What HMRC does not tell you is that an average of £850 is owed to clients that overpaid tax. HMRC has stated that there are around five million recalculations that need to be attended to, so you can imagine the time and effort it takes to resolve that issue.”

Since news spread of two million people overpaying, most people attempting to contact Inland Revenue are met with a lengthy call time and still come away with no clear guide to claiming back the monies they’re owed. In HMRC’s defence, they have attempted to make the process seem simple (indeed, it is relatively straightforward to submit forms), but it is the time taken to ensure that you get the correct refund paid back that is damaging their reputation.

To submit your tax return through a reputable agency, and ensure that you get the correct refund each and every time, give 1st Contact Tax Refunds a shout. Submit your claim before 1 July and you’ll be entered into our draw to win double your tax refund (if you’re already a 1st Contact client, good news is you’ll be entered automatically). 

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