Date: 16 September 2010
Tax chiefs were hauled to give evidence to the Treasury Select Committee recently and admitted that a staggering 24million people could have had their tax bills miscalculated over recent years.
Six million will get letters before Christmas either demanding an average of £1,400 or offering a refund by cheque after a new computer system identified errors in their PAYE accounts.
But MPs heard there is a backlog of a further 17.9million ‘unresolved’ tax cases dating back to 2005, which HMRC is hoping to process by 2012. Many of those could now face demands for underpaid tax.
Ministers have ordered HMRC to make another climb down to try to appease public anger.
Yesterday they agreed that those facing tax demands of £2,000 or more as a result of errors will not be charged interest on the money they owe.
HMRC have stated 'Only those who will not engage with us will be charged interest'.
The Revenue has already agreed to waive bills of £300 or less, meaning 900,000 taxpayers will be spared paying any money back – at a cost of £160million to the Exchequer.
HMRC also insisted the fiasco was not all bad news, since while 1.4million people will have to pay an extra £1,400 in tax, 4.5million people will get refunds of £400 on average.
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