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HMRC warned on wrong tax codes

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The Inland Revenue should be doing more to warn people about wrong tax codes - with 25m being sent out this year there are bound to be more errors than usual.

The Chartered Institute of Taxation is calling for a big advertising campaign to warn people to check new codes and put more resources into dealing with queries from the public.

The CIT believes call waiting times are already on the rise this week. It also suggest that P2 letters should include a note warning of the possibility of mistakes and telling people how to check their codes.

Andrew Hubbard, President of the Chartered Institute of Taxation, said: “Most people on PAYE are used to assuming that what the taxman sends them is correct. Many file away coding notices without even bothering to check them. But this year, many of them are being given wrong information, and unless they spot it and tell HMRC, their employer will receive the wrong information too, and they could get a nasty shock when they open their April pay packet and see it is as much as a hundred pounds lighter than they are expecting."

Hubbard said the new PAYE system was potentially very good and that this was no more than a teething problem, albeit one which needs fixing. Full release is here.

The Revenue admitted some wrong codes had gone out and apologised. In other news hundreds of thousands of injured and retired armed forces pensioners have received letters warning them that their pensions will be taxed at 20 per cent. The mistake is also being blamed on new Revenue computers.

The letters went to 186,115 veterans and war widows, according to The Yorkshire Post..

Veterans are advised to get in touch with HMRC if they receive such a letter. ®

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