Last month HMRC started an automated reconciliation of UK taxpayers’ PAYE records.
Tax overpayments 2010-11
Initially HMRC will be looking for taxpayers who have overpaid tax. By the end of September 2011 HMRC should have submitted forms P800s and refunded any tax overpaid. It is estimated that up to 3.5m taxpayers will be repaid an average of £340 each.
Tax underpayments 2010-11
In the following quarter, to the end of December 2011, HMRC will be sending out P800s to taxpayers who have underpaid tax for 2010-11. It is estimated that 1.2m people will owe an average of £550 each. In most cases the tax will be recovered by reducing code numbers for 2012-13.
It is worth noting that for 2010-11 the amount below which underpayments are written off is reduced from £300 to £50. Also the maximum liability that can be recovered by a reduction in a code number will increase from £2,000 to £3,000 for 2012-13.
If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletterSubscribe