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Nearly six million people have overpaid tax
More than 5.6 million people overpaid tax in the 2023/24 financial year, new figures from HMRC reveal.
In total, taxpayers overpaid £3.5bn in income tax, with experts blaming tax code issuing errors and complicated rules. Tax codes are issued by HMRC and are used by employers or pension providers to work out how much income tax to take from your pay or pension.
Find tips and personal finances news in the Money blog But HMRC can make mistakes and issue the wrong code, which means more - or less - of your income can be taken incorrectly. The tax office can issue the incorrect tax codes due to: Assuming that an employee is still receiving company benefits-in-kind such as company cars, healthcare and even gym memberships even though they may no longer be receiving that benefit;Incorrect assumptions about an employee's additional income, such as rental income, dividends, or freelance work that they are no longer doing;Confusion over how many jobs an individual is working;Out-of-date or late employer payroll information.Neela Chauhan, partner at UHY Hacker Young, an accountancy firm that uncovered the figures through a Freedom of Information request, said HMRC wouldn't always correct mistakes automatically and the onus was on taxpayers to check they're on the right tax code.
"Millions of people are paying the wrong amount of tax simply because HMRC is almost guessing what they earn. For too many people, this will go completely unnoticed," she said.
"Individuals must check their tax codes and year-end PAYE summaries for mistakes. Particularly those with any form of non-PAYE income or company benefits." Read our guide to tax codes and how to check yours....
Amir Nisi
Creative and experienced content writer with 6+ years of experience lazy to create unique content strategy for News5 to turn website visitors into customers.
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