The recent news of HM Revenue and Customs’ new computer system reconciling accounts and finding numerous errors has been just one more bad jolt to the UK worker. The mistakes were made due to miscalculations by HMRC tax officials and involved those using the Pay As You Earn system. Many are angry that in an economy where things are hard and are expected to be harder with new budget cuts and more taxes that the government is seeking payback when the mistake was theirs. At the very least they would like an apology, but HMRC’s Permanent Secretary Dave Harnett has said that there was “no need to apologise”.
It has been estimated that there were 2.4 million people that were discovered to have underpaid during the reconciliation. The government wrote off anything owed up to 300 pounds. The write-off left 1.4 million people owing the government about 2 billion pounds. This averages to 1,428 pounds per person owing money. There were also 4.3 million people discovered that had overpaid their taxes.
In an interview with BBC Radio Harnett said: “I’m not sure I see a need to apologise. I’ve read the papers, listened to the media and heard stories of HMRC blunder and IT failure. Neither of those is true. Every country that I know of that has deduction of tax from wages in salaries has to do reconciliation at the end of each year and we’re doing one.”
When asked if he felt the error was extraordinary due to the fact that there were millions that had overpaid and millions that had underpaid, he said: “I don’t think they are extraordinary. There is a need for reconciliation every year.
“Once or twice in the past the numbers have been very large, sometimes they’re less. It depends on how the system has been operating and what issues there have been.”
A coalition government spokesperson said Mr. Harnett should have been clearer that hardship cases were to be treated fairly. While they will be allowed to have a longer period to pay back the tax, even in some cases three years, there will be interest owed on the outstanding balance until it is paid.