Million taxpayers charged wrong amount, says watchdog

Million taxpayers charged wrong amount, says watchdog

More than 1 million people paid the wrong amount of tax last year because Revenue and Customs either got their tax code wrong or made mistakes when they calculated their tax, a report by the National Audit Office, parliament's financial watchdog, says today.

The disclosure comes a day after the revenue demanded the right to take cash from people's bank accounts without a court order if they failed to pay their tax bills on time. Richard Bacon, Tory MP for South Norfolk, said: "Given that over a million tax records contain errors, it is far from certain that HM Revenue and Customs should be allowed to interfere with the bank accounts of potentially innocent taxpayers."

The report says some £157m has been overpaid by 540,000 taxpayers - averaging £290 a time - with pensioners being particularly vulnerable to mistakes.

Some £125m has been underpaid by taxpayers - averaging £250 a time - with many facing surprise extra bills when Revenue and Customs staff realised their mistake.

The revenue blamed the errors on the increased complexity of processing income tax owing to people changing jobs more often, as well as the need to process certain cases manually.

The report revealed that the introduction of a car assembly line approach to checking tax returns resulted in big increases in errors in the first six months of the operation.

Some £9.7m was spent on introducing the system, pioneered by Toyota and Unipart,.....continued below

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which means that six people handle different parts of an individual's tax return against two previously.

The report says that once the system is bedded down it will save staff and make the process more efficient.

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