Of the almost 46 million individual PAYE records held by HM Revenue & Customs, nearly 10 million are likely to contain errors, HMRC admitted last week after an internal review; with the Parliamentary Treasury Select Committee stating that HMRC were “A 19th Century organization that desperately needs a fundamental reform to bring it into the 21st Century”.
The problem for most PAYE taxpayers is that you simply don’t know if they’ve given you an incorrect Tax Code and even if you query it they can still, and often do, get it wrong.
I deal with a quite a number of retirees who are required to complete Tax Returns because they have income, often quite small, from various sources. Earlier this year, I was approached by a 72 year old, who after nearly a year, 2 personal visits to the local Tax Office, 6 letters and umpteen ‘phonecalls, had received a staggering 21 Tax Coding Notices (P2’s), including two different ones on the same day!
And if you think that was bad, anyone in receipt of a P11D (Details of any of benefits and expenses received as an employee) the error rate rises exponentially.
If you have received a P2 or P11D and suspect it may be wrong, my advice is to first check with your payroll department, as you’re far more likely to get a sensible answer from them ,rather than hanging on for hours on the Tax helpline, which from my experience, is usually very little help at all. Alternatively, try your local Accountants, most decent firm offer a free initial interview and will probably be able to tell you there and then if there has been an error.