More People Paying the Wrong Amount of Tax

HMRC estimates that 3.5m people paid too little tax through the PAYE system in 2013–14, and will now have to pay back the money in future years. 

A further 2m people are thought to have paid too much tax. The figures mean that a total of 5.5m people paid the wrong amount of tax throughout the year, an increase on the previous year’s figure of 5.2m. 

This is in spite of the introduction of HMRC’s £270m “Real Time Information” (RTI) programme, which was meant to improve the system’s accuracy. 

HMRC said the increase in corrections was largely down to an increase in the number of people in employment, and that RTI was still expected to result in a reduction in the number of corrections over time. 

Source: The Daily Telegraph

We Say: No surprises here – this issue resurfaces each single year, and makes for a really emotive headline, doesn’t it? 

With the introduction of RTI (reporting PAYE in Real Time), the Telegraph is right that we are still seeing many incorrect tax codes being issued by HMRC. With 2013-14 being the first year of RTI reporting, there was always going to be a learning curve – not only for HMRC, but for payroll bureaux and employers alike. To properly gauge the impact of this system, we’d suggest looking at this again at the end of Year 2, and not writing off the project before it’s really got going. While it’s been a bit of a painful one for some to get their records up to scratch to withstand the scrutiny and transparency of RTI, actually, it’s no bad thing that HMRC are asking for accuracy upfront on PAYE submissions. 

Mystic BKL predicts an improvement to the accuracy of PAYE coding from this tax year onwards. You read it here first, remember? 

If you have any doubts regarding your tax code, give our team of experts a buzz, we’d be Really and Truly Interested to talk to you. (See what we did there?) (oh, and a shameless plug of our awesome services shoehorned in for good measure…) 

For more information, please contact London Accountants Berg Kaprow Lewis.

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NICOLA HALL

BILSHAN MENSAH

Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.

ELANA DIMMER

Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.

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