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HMRC admits income tax errors

HM Revenue and Customs has admitted that more than ten million people could be receiving rebates after paying too much income tax.

Last week the tax office revealed that 4.3 million employees were in line for repayments as a result of errors in the Pay-As-You-Earn system over the last two years.

But according to the Daily Telegraph, it has now emerged that a further 5.8 million people made overpayments before March 2008 and could be due a refund.

The first of the letters informing people of rebates will be arriving in the post this week. It is hoped that all of those affected will be notified by the end of the year.

However, in addition to the overpayments, HMRC has also found widespread underpayments, which means that some people will be facing higher tax bills.

Around 1.4 million people are thought to owe an average of £1,400 each in income tax, which will have to be repaid from next year through changes in their tax codes.
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