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5 "Tells" that the Stock Markets Are About to Reverse

HMRC PAYE Tax Error To Cost Workers £1,400 Each, £400 Rebate for Others

Personal_Finance / Taxes Sep 04, 2010 - 02:33 AM GMT

By: Nadeem_Walayat

Personal_Finance

A Treasury department audit of the Inland Revenue (HMRC) has revealed huge blunders in calculation of tax owed under the PAYE system which means 1.5 million workers have paid too little tax amounting to an average tax bill of £1,400 each or £2 billion in total. Against this HMRC was found to have over deducted tax from 4.3 million workers totaling £1.8 billion which averages out at a tax refund of £400 each.


The HMRC has declared that letters will be sent to the 6 million of tax payers effected by HMRC incompetence between now and Christmas with tax refunds paid by cheque and tax owed collected via the PAYE system by adjusting individual tax codes.

The HMRC tax error could hit those on average earnings hard as a £1,400 deduction in NET pay taken over a tax year would amount to a deduction of £116 per month from average net pay of £1,583 per month, which equates to a 7.3% pay cut! Which will be on top of VAT rising from 17.5% to 20% from January 2011 and tax credit cuts as well as ongoing inflation of above 3%, which effectively means an effective cut in purchasing power of as much as 20% for a significant number of people with the average impact put at 15%.

If you are in receipt of a tax demand then the best strategy is to do your own calculations as HMRC will likely have gotten it wrong again for many people. Even if the calculation does appear to be correct then still appeal the decision, stipulating your personal circumstances which may result in the tax debt being written off.

SCAM WARNING - The Inland Revenue will NOT Contact you by email, so do not fall for the Email scams that announce tax refunds due.

And Always check your tax calculations yourself as the Inland Revenue despite their new £400 million computer system will STILL continue to make mistakes.

Comments and Source : http://www.marketoracle.co.uk/Article22429.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 500 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Hemscott Associates
15 Apr 11, 16:55
Tax Error

only backs up what we have known for a number of years. The hmrc is badly run and everybody should be checking there paye records.


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