Tax chief apologises over tax error
The country's top tax official has been forced into an apology to 1.4 million people facing surprise bills amid claims he was "out of touch with reality".
Dave Hartnett, permanent secretary at HM Revenue & Customs (HMRC), said he was "deeply sorry" that taxpayers were being asked to pay back an average £1,428
His statement was issued after he caused fury by insisting the authorities were not to blame and declaring: "I'm not sure I see a need to apologise."
One Tory MP accused him of "arrogance" and said HMRC were warned for years that outdated systems meant such a situation was inevitable.
And as the furore over his comments increased, HMRC rushed out an apologetic statement from the senior civil servant.
"I am deeply sorry that people are facing an unexpected tax bill," Mr Hartnett said. "Everyone in HMRC is working hard to make this as painless as possible. I apologise if my remarks came across as insensitive. I am working flat out with my colleagues to ensure everyone's tax is correct and the new computer system will help us do this. It was this new system that revealed the extent and size of reconciliations required and will help us be more accurate in future but we do not underestimate the distress caused to taxpayers and once again I apologise."
It emerged this week that an estimated 2.3 million people underpaid income tax during the past two tax years due to errors in their Pay As You Earn (PAYE) tax code. The 900,000 owing the least were reprieved after the Government wrote off some of the debt but ministers said the Government could not afford not to collect the rest.
Most people will have between one and three years to repay the money through their pay packets, but those with £2,000-plus bills face having to find the cash within three months. The wrong tax may have been paid if workers or employers failed to notify HMRC of a change of circumstances or the tax authorities did not act on information they were given. More errors than usual have been thrown up this year due to the use of a new IT system alongside the decades-old PAYE (pay as you earn) income tax system.
In an interview with BBC Radio 4's Money Box, Mr Hartnett insisted the situation was not "extraordinary" and rejected claims HMRC was to blame.
"I've read the papers, listened to the media and heard stories of HMRC blunder and IT failure - neither of those are true," he said. "Every country that I know of that has deduction of tax from wages and salaries has to do a reconciliation at the end of each year and we're doing one." He went on: "We didn't get it wrong. This needs to be reconciled."