These problems appear to have increased following the amalgamation by HMRC of numerous computer systems into the new PAYE service.
It is widely thought that one in five workers and pensioners are paying either too much or too little tax because their tax codes are wrong. Taxpayers are overpaying tax by some £500m per year. It is important, therefore, you check your tax code to ensure it is correct.
The following are common issues that have arisen.
- Fuel benefit in respect of a company van of £1,000 coded out. The correct amount is £500.
- HMRC notified of the change in a taxable benefit, such as a company car, but the code has not been amended or has been amended incorrectly.
- Medical benefit incorrectly coded out.
- BR code notified for no apparent reason. Tax therefore deducted at Basic Rate with no personal allowances given.
- Complex tax cases, multiple income sources, incorrectly processed, resulting in incorrect code numbers.
Most people automatically assume their code numbers are correct. This is not our experience. It is important that you check the accuracy of your codes as you may be due tax back from HMRC or more worryingly have an underpayment at the end of the tax year.