Having sent out letters notifying 2.3 million taxpayers of tax refunds totalling £680 million this summer, HMRC are now issuing notifications of tax underpayments following their customary end-of-year reconciliation for 2010/11.
This time around, taxpayers will not be able to claim to have the tax arrears waived by Extra-statutory concession A19 as the underpayments are within the time limit allowed for the department to issue such demands.
Where the tax owing is less than £3,000 it will be collected by reducing a person's PAYE code number.
Of the 1.2 million taxpayers who have underpaid tax, 146,000 are pensioners who will shortly be receiving letters from HMRC. Many of these have underpaid tax because of the Revenue's failure to include their state pension in their 2010/11 PAYE codings.
To ease the pain however, HMRC will collect the tax over three years from April 2012 and offer pensioners both an apology and explanation as to why the underpayments arose.
There still remains a number of cases from 2008/09 and 2009/10 that require 'manual intervention' although HMRC does not expect the majority to have any tax implications.
Leave a Reply