The Low Income Tax Reform Group is urging taxpayers, including umbrella company contractors, to double check calculations if they receive letters from HMRC.
The chairman of the LITRG, John Andrews, warned people who receive a letter offering them a tax rebate that the Revenue’s calculations are only as accurate as the data it has on its computer.
He explained that his organisation helped numerous taxpayers understand their PAYE calculations last year and he hopes they can do the same for the tax year that ended this past April. He also pointed out that people should contact the Revenue if the refund they receive is wrong, regardless of whether it is too large or too small. In the case of an overpayment, HMRC could charge the recipient a penalty if it feels that person should have spotted it.
Furthermore, the LITRG says HMRC must address all of the problems attached to PAYE before the introduction of real-time filing. The Taxman has been struggling to resolve the under and over payment problems and it is vital that these are all resolved before the new system comes into force in 2013.
People on low incomes could suffer badly if their problem has not been resolved and this would cause difficulties for the delivery of universal credit.
The Reform Group also pointed that the NAO report into the Taxman has already warned that the accuracy of PAYE codes could suffer because of staff reductions and the increased volume of taxpayer records.
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