It will probably come as no surprise to umbrella company contractors to learn that complaints against HMRC have increased dramatically over the last couple of years.
Umbrella company contractors might be unsurprised to hear that the Commons Treasury select committee has been told that HMRC is nearly at breaking point due to recent staffing cuts.
Despite various blunders by HMRC last year that affected umbrella company contractors, the department still spent nearly £800,000 more on bonus payments to staff than it paid out the previous year.
The fiasco surrounding HMRC’s attempt to introduce a new system to cope with PAYE codes earlier this year continues with news that PAYE processing errors resulted in a 15.7% increase in underpayments and a 148% increase in overpayments.
Ten of thousands of people, including contractors and freelancers, have been affected by the tax coding problems caused when HMRC migrated their records to a new computer system earlier this year.
According to data published by the Society of Professional Accountants, as many as 1 in 5 PAYE tax code notices issued by HMRC since the start of the year could be wrong.
HMRC is urging employees, sole traders, limited company contractors and umbrella company workers to contact them if they believe they have received an incorrect tax code this year.