News
29 Oct 2013 10:19am

HMRC warned over tax codes

Incorrect tax codes mean one in three taxpayers could be in danger of paying the wrong amount of tax, according to UHY Hacker Young

The UHY analysis of tax codes to clients suggested around 37% would have resulted in people paying the incorrect amount of tax.

The research revealed that many of the mistakes involved were “quite basic”.

For instance, UHY says, this year one of its local offices saw errors for 20 different taxpayers in just one week relating to benefits provided by employers, such as company cars and private health cover.

In most of these cases the code sent by HMRC completely omitted to account for the tax due on the benefits, a mistake that could mean individuals are underpaying their tax by thousands of pounds.

Roy Maugham, partner at our UKY, said, “Mistakes most frequently occur when someone has several sources of income, for example income from an investment as well as a salary and benefits from their employer, or where they have received a large one-off sum such as a dividend payment.”

“HMRC really needs to make more of an effort to eliminate these errors as generally people trust its calculations and assume that they are paying the correct amount of tax.

"If taxpayers do spot a mistake, it is now an even bigger headache to sort out because HMRC has made it harder to challenge unfair tax bills.”

Raymond Doherty

 

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