Warning for pensioners over tax codes

It was revealed recently that the systems being used by HM Revenue and Customs had resulted in millions of tax codes being incorrect, which in turn was leading to many people potentially paying too much or too little in the way of tax.

It has now emerged that pensioners are amongst those that could be affected by the tax code blunders, and are being urged to keep on eye on their tax codes to ensure that they are not paying too much or too little tax.

Millions of tax code notification have been sent out, and according to officials from the Low Incomes Tax Reform Group (LITRG) a number of errors have been picked up that could be affecting the pensioners that receive the tax codes.

HMRC has admitted that there has been a problem with the tax codes, and has blamed the amalgamation of twenty different systems into one system, which it said has shown historical data up as up to date data resulting in incorrect coding.

The codes that have been sent out help to determine how much of the recipient’s income is taxed each year, and the incorrect code could mean that a person end up paying too much tax or too little tax. Some people could end up paying more than £100 more in tax per month than they need to as a result of these mistakes. In some cases people have not had allowances taken into account, and other mistakes include people who have changed jobs being taxed on two jobs.

HMRC stated: “We accept and very much regret that errors have occurred in some of the notices that have issued but the majority of codes are right. We recognise that some of the data brought forward from previous systems may be inaccurate and we are taking every opportunity to correct that.”

Tags: Taxation in the United Kingdom, Tax code, customs, finance, end, Low Incomes Tax Reform Group, amalgamation, Business Finance