Millions of taxpayers, including umbrella company contractors, could be in line for a tax refund after HMRC reconciles its books.
4.7 million people will soon be receiving a letter telling them they paid too little, or too much, tax last year. According to the BBC, as many as 3.5 million taxpayers could get a rebate of about £340, but a further 1.2 million will be informed that they owe the Revenue between £500 and £600.
The CIoT’s tax policy director, John Whiting, said the PAYE system generally sorts out an individual’s income tax liability but in some cases the end of year reconciliation is needed to finalise the situation. People need to keep an eye on their tax situation, especially if they have more than one source of income, work on temporary assignments or move to a different employer.
In a bid to boost its revenue, HMRC intends to pursue anyone who owes more than £50 in tax this year; previously it only chased people owing in excess of £300. Furthermore, last year’s legal time limits that let some people avoid repaying overdue tax will not be applicable to this year’s demands.
One of Grant Thornton’s senior tax partners, Mike Warburton, said that 160,000 people who have just started drawing their basic state pension last year could be amongst those to receive a tax demand for up to £1,000. He explained that, without realising it, many continued to have their full personal tax allowances erroneously attributed against other sources and underpayments easily mounted up.
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Image: US Mail by Steve 2.0
