Tax code cock-up

A couple of months ago it was reported that due to a cock-up on the part of HM Revenue and Customs (HMRC) or rather the all new ‘singing and dancing’ computer system hundreds of thousands of pensioners have been left out of pocket due to incorrect tax codes.

Now it appears that it isn’t just pensioners that were affected, thousands of employers and self employed were also given the wrong tax codes. Some people have even found that their salary has increased to six figures, bumping up their tax liability by the same amount.  

This week a national newspaper revealed that there were up to 100,000 people affected and they are going to be out of pocket for quite some time. HMRC have admitted that they have been inundated with calls and are unable to deal with all enquiries in good time with some ‘clients’ even finding themselves cut off before gaining any satisfaction.  

According to one contact since the situation was uncovered in January, the HMRC Customer Service department has received over 50,000 calls.

The HMRC have admitted that they are swamped with calls questioning the tax code on last month’s pay slip, "Inevitably at busy times we may be unable to answer all our calls. We are working hard to maintain a good customer service. We know that some customers are frustrated at being disconnected before they speak to an advisor after taking the time to go through the messaging system. We are now taking new measures to help prevent this from happening."

This could not come at a worse time. The new Government is determined to make cuts in public sector spending but it seems HMRC need more not fewer resources if they are to have any chance at sorting out this particular problem within a reasonable space of time.

John Whiting of the Chartered Institute of Taxation stated, "Huge numbers of people were given the wrong tax codes by HMRC's new computer system. Revenue staff has worked incredibly hard to review three million records in March and April, but the situation should never have arisen in the first place. Contact centres are struggling to cope and the HMRC need to look at whether they are adequately resourced for the future."

If you think that you have been given the wrong tax code and have paid too much tax and would like further information then visit the website at http://www.hmrc.gov.uk/incometax/code-wrong.htm for details of who you should contact.