According to the latest word being released by HMRC, as many as six million tax payers in the UK could be owed a rebate to the tune of £300. This is good news indeed for those looking forward to a rebate but for up to one million tax payers may receive notification that they still owe £600 which was underpaid.
Last year the government put in a new computer system that is making it easier to find discrepancies and some of these are going back years. A spokesperson for HMRC said that the average amount underpaid would be somewhere between £500 and £600 but that government would be willing to work with taxpayers on getting that money paid. Arrangements would be made to pay it back in instalments if it became necessary or by adjusting their current tax code.
The 6 million who will be told that they actually paid too much in taxes will have an average rebate of approximately £300 for the tax year 2007 – 2008. The government spokesperson stated that it would most likely take all of next year to sort through the problem, send out the required notifications and pay back all the rebates it finds along the way.
True to government, HMRC is stating that the process of finding money owed to taxpayers is going to take longer than the process for finding money that is owed to them. However, government did state that the new computer system would also enable them to pay back money that was owed for years back once it is up and running up to snuff.
Even after the system is seated in and working as it is meant to do, there will always be discrepancies at the end of every tax year which will need to be rectified. In the long term, these cases will become fewer and fewer as the computer ‘bed in’ and begins spotting problems as they come in rather than at the end of tax years.