Revenue And Customs To Issue Tax Rebates For Six Million People
Around six million people could receive tax rebates of around Â£300 each, while one million others will be told they have underpaid to the tune of Â£600, it has emerged.
Her Majesty's Revenue and Customs (HMRC) has carried out an annual check to make sure that the amount of tax and National Insurance deducted by employers matches its records.
One million people will receive letters in the next few months notifying them that they have paid too little tax. The average amount owed per person is expected to be around Â£500 to Â£600, an HMRC spokesman said.
He explained that those affected will be able to pay the amount back in stages if necessary, by either having their tax code adjusted or coming to an agreement with the Inland Revenue.
Six million other people will be told that they paid too much tax in the year 2007/8 or earlier, with average rebates of around Â£300. This process will take longer, but HMRC hopes to have it completed by December 2012.
Last year the Inland Revenue brought in a new IT system which made it easier to spot discrepancies and therefore more cases where people have over or under paid came to light.
The HMRC spokesman said: "Money that is owed going back many years is now going to be automatically paid back as we get the tax system up to scratch.
"We are getting cases that were left unreconciled up to date as quickly as possible. Anyone owed money will be paid back with interest without the need to contact us. The fact is there will always be some cases at the end of every tax year that require an under or overpayment to balance but these cases will reduce as the new system beds in."
Matthew Elliott, chief executive of pressure group the TaxPayers' Alliance, which campaigns for lower taxes, said: "Clearly the tax system is too taxing, even for the taxman. A simpler, fairer system could decrease mistakes like these and encourage economic growth.
"Until simplification happens, overly complicated taxes will continue to be an administrative nightmare for HMRC and a confusing and overwhelming beast for taxpayers."