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.
Those affected will be refunded but in the meantime they are left out of pocket. Worst hit are pensioners who have complex tax codes.
Various glitches occurred during the transfer including personal income tax allowances being removed and higher tax codes being allocated. One of the worst errors was a 1 being placed in front of the salary figure which inflated taxable income by £100,000.
Understandably the HMRC call centres have been exceptionally busy and people are struggling to get through to report their PAYE problems. So far the call centres have received around 50,000 calls about tax coding issues and they estimate that up to a further 50,000 people have been affected.
A significant number of taxpayers only discovered the coding errors when they received their April salary advice. HMRC has apologised for the fact that due to the volume of calls it can be hard to speak to an adviser at the moment and have implemented new measures to prevent this.
The exact number of people affected is unknown and there is no way of knowing how many errors have been rectified as HMRC does not maintain a central record of every code they have revised nor do they keep a record of the number of cases they have actioned.
To make matters worse, it’s going to become increasingly difficult to visit a tax enquiry centre. 58 UK centres are to have their opening hours cut and some will only be opening for one or two days per week.
20,000 staff have been axed from HMRC since 2006 and a further 5,000 jobs will go by March next year. Also since 2006, over 200 tax offices have been shut down, are due to or are under threat, according to the Public and Commercial Services union.
Yesterday, tax workers staged a protest outside the Treasury to complain about the cuts.
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