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Tax code ‘error’ could cost workers hundreds of pounds

Published 26/01/2010

Workers may have been sent the wrong tax codes following the introduction of a new computer system at HM Revenue & Customs, a tax group has warned.

The Chartered Institute of Taxation believes wrong information may have been sent out to “huge numbers of people” and warned that unless it was corrected, it could cost them hundreds of pounds.

The group said many people with only one job were being sent two or more tax coding notices with different tax codes.

It said if the error was not corrected by the time the new codes come into force in April, wrong information could be sent to employers and pension companies, leading to them deducting too much tax through the Pay As You Earn (PAYE) scheme.

In the worst case, the group said people could pay £108 a month, or £1,295 a year, too much.

Andrew Hubbard, president of the Chartered Institute of Taxation, said: “Most people on PAYE are used to assuming that what the taxman sends them is correct.

“But this year many of them are being given wrong information and unless they spot it and tell HMRC, their employer will receive the wrong information too and they could get a nasty shock when they open their April pay packet.”

Belfast Telegraph

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