5 million HMRC recalculations

[Coman]

A article earlier this week in a broadsheet newspaper details how HMRC has recalculated bills for about 5 million taxpayers.

The recalculations are usually necessary because the tax deducted from salary and other income is not correct. The tax paid in a previous year is used to estimate tax payable in the current year. Real Time Information (a new payroll system in place since April 2014) is supposed to iron out a lot of these problems, however it is far from foolproof.

Payroll inherently relies on the taxpayer updating HMRC, the employer updating HMRC, and HMRC correctly and efficiently processing the information. With a complex tax system and an administration bursting at the seams it is easy to see how payroll frequently falters.

This is one of the reasons that people with incomes over ?100,000- or with tax affairs that carry complications- complete a Tax return. A Tax Return provides piece of mind that any tax payable or repayable has been established and done for each tax year. It can also be a chance to spot any tax savings, before it is too late to make a claim for over payment of tax.