Over 4 million could get tax rebates
16 July, 2011
As the HMRC reconciles its books, millions of taxpayers, including Umbrella Company Contractors, could be in line for refunds.
The HMRC will soon send out 4.7 million letters telling people that they have paid too little, or too much, tax.
In September last year, the HMRC was strongly criticised when it said that 5.7 million people had not paid the correct tax via PAYE for the years 2008-09 and 2009-10. The outcome of this was that 1.4 million people had to pay more, while 4.3 million people received cheques for overpayments.
Top taxman Dave Hartnett apologised for last year's flurry of letters to taxpayers, and the HMRC explained at the time that the large number of apparent errors had been uncovered by a new computer system.
According to the BBC approximately 3.5 million taxpayers could get a rebate of about £340 this year, with a further 1.2 million being informed that they have underpaid and owe between £500 and £600.
Experts are advising that the PAYE system normally sorts out an individual’s income tax liability; however, sometimes an ‘end of year reconciliation’ is needed to finalise the situation.
People (especially those that have more than one source of income, work on temporary assignments or move to a different employer) need to keep a close eye on their tax situation.
Previously the HMRC only pursued people owing in excess of £300. However in an attempt to boost revenue, it now intends to pursue anyone who owes more than £50 in tax this year.