Category Archives: Tax

Taxpayers may have a ‘get out clause’

HMRC may have exceeded time limit

Over the weekend, it was announced that about 6 million people have paid the incorrect amount of tax. Under the Pay As You Earn (PAYE) system, about £2bn was underpaid and £1.8bn was overpaid to HMRC.

Letters to taxpayers have begun to arrive today stating that they have paid the wrong amount of tax. However, taxpayers could find a way to not pay the underpaid tax. Under new tax rules, HMRC must issue demands for underpaid tax within 12 months of the end of the tax year in which it became aware that people had underpaid. This shows that incorrect tax due for the tax year ending in April 2009 may not be claim worthy due to exceeding the time limit. This could be a hurdle for HMRC and may need to be crossed if they are to receive their tax revenues.

                                                       

I feel that the tax system needs to be cleaned up and kept up to date sooner rather than later, because if these incorrect tax revenues are not settled it could cause problems for using the planned revenues for the current coalition government. The tax codes and amounts of tax need to be corrected to ensure this type of problem does not occur again. Tax payers need to ensure they are issued the correct tax codes and check their pay slips to ensure their employer and themselves are paying the correct amount of income tax every week/month. This will help keep them up to date and ensure they are not over or underpaying their tax.

Below is the article regarding this story:

HMRC may have missed time limit on tax bills

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