- LONDON: British tax collectors say a new computer system has revealed that almost 6 million people have paid the wrong amount of income tax, and 1.4 million will be told to repay an average of 1,500 pounds ($2,300) each.
The first batch of letters has been sent out and are due to arrive on people's doormats on Tuesday, with the rest arriving by Christmas.
A total of £2 billion has been underpaid through the Pay as You Earn system over the past two years, meaning 1.4 million taxpayers will be asked to fork out another £1,500 each on average.
But 4.3 million people have paid too much tax and are set to enjoy an average rebate of £418, because a total of £1.8 billion was overpaid during the same period. Some taxpayers may face both underpayment and overpayment notices.
The money will be collected or refunded through their tax codes for 2011-12.
Where taxpayers can demonstrate they have provided all necessary information, tax authorities will consider writing off demands, but there is no guarantee.
They said some people would always have paid either too much or too little because of changing circumstances. But the unusually high number of revisions now the result of a new IT system having been put in place that reflects changing circumstances more accurately by looking at taxpayers' employment details rather than their employers'.
Campaigners said the magnitude of the mistake was unacceptable.
“It is completely unacceptable that a mistake of this magnitude could have happened,” said Emma Boon, manager of the TaxPayers’ Alliance campaign.
“We’ve seen errors resulting in over or underpayments in the past, but the scale of this is shocking.”
