Due to a HMRC error revealed in a leaked email, over 5m UK workers may have had their tax wrongly calculated last year.
This will affect those who over or under paid last year as it’s been discovered that they may have still not paid the right tax contributions. This means 5m workers are now unsure as to whether they may owe or be owed by HMRC.
For many, they will have already received letters and repayments related to the previous mix up, but now it seems they may be incorrect. In light of this, HMRC has stopped issuing repayments until the problem has been solved.
HMRC claim that tens of thousands would be affected, but have also admitted they don’t know the size of the issue as of yet meaning the number could climb much higher than the 100,000 maximum they suggest.
Elaine Clark of Cheapaccounting said: “This is extraordinary, a disaster, and heads need to roll at HMRC.”
The leaked email, which was released by The Telegraph, senior HMRC staff were informed that “thousands of mistakes were made”. Further advice was given to tell inquiring taxpayers “not to repay any underpayment” of tax.
This latest mistake does not bode well for HMRC’s plans to increase their powers. With the tax man being able to take money directly from people’s bank accounts without external checks or tribunals, many are worried HMRC are not competent enough to be trusted with that kind of power.
Stuart Phillips of Private Office, said: “If the Revenue continues to make these kinds of mistake it completely undermines confidence in the tax system – and particularly new and aggressive efforts to collect more tax such as lifting money directly from people’s bank accounts.”