Because of a fault with the HM Revenue & Customs (HMRC) new computer system, up to 25 million tax payers may have been sent the wrong tax codes which could result in some individuals paying around £108 per month extra.
The Chartered Institute of Taxation (CIOT) say that about 25 million coding notices are being distributed this year, which is about twice last year's number. All tax payers are therefore urged to check their tax codes against last years allowance, this code is usually found on payslips as well as the P60.
The changes will not come into effect until April of this year and employees cannot blame their employers for the mistake as the employer can only work on the information given to them by the tax office.
Apparently the HMRC’s computer system was failing to distinguish between current jobs and older ones, leading to tax codes being calculated on the assumption that someone has more than one job.
This could then lead to the individual that now only has one job receiving two notices, one from his previous job that no longer exists and their current job, therefore splitting the yearly allowance before paying tax or allocating some of it to a job they no longer had. Either way this would then direct the current employer to deduct too much tax.
You personal allowance is recorded on your payslip and the code details to your employer or pension firms how much tax to deduct during the financial year, April 2010 - 2011. So it is important that it is correct!
You will need to contact the HMRC and explain what you think is wrong, I would suggest you do this online at HMRC wrong tax code
If you need to telephone then you will have to find your nearest Tax office where you live. To do this you will need your tax reference number, this will be on any of the following;
Once you have this insert the details in the HMRC tax office locator.
This is big, we need a publicity campaign on this to make everyone aware as this is not only restricted to PAYE staff but also those on any type of pension as well.
The government needs to act positively and decisively and make arrangements to ensure that when someone has been identified as having paid too much tax they then get their money back promptly and not have to wait months.
Any delay could push many families over the edge and into arrears on payments which can then impact on their credit file.
You may wish to read Fraudsters attack tens of thousands tax payers offering false rebates.