HM Revenue and Customs (HMRC) has embarked on its latest checks that employers have been deducting the right amounts of tax from their workers. Preliminary estimates suggest that up to 4.7 million people may have paid incorrect amounts of tax for the year 2010\/11.<\/p>\n
The annual reconciliation process involves cross-checking details on the PAYE system, ensuring that the income tax and national insurance contributions submitted by employers tally with the information contained on HMRC\u2019s database. While most of the 40 million people on the database will have paid the correct amount of tax, some, through changes in circumstances such as moving to new jobs or taking on additional sources of income, will either have over – or underpaid their taxes.<\/p>\n
HMRC has estimated that between 1.7 million and 3.5 million taxpayers have paid too much and will be entitled to refunds averaging \u00a3340 each. However, some 1.2 million might have paid too little and will be asked to make good the shortfall at an average of between \u00a3500 and \u00a3600 each.<\/p>\n
Most of those who have paid too little tax will see their tax codes adjusted for the year 2012\/13, the money automatically deducted from their salaries. Given the scale of the repayments last year, HMRC agreed to write down amounts owed below \u00a3300. That concession has now been dropped, and HMRC will seek to recover all debts above \u00a350. Up to \u00a33,000 per individual in underpayments can now be collected through the PAYE system, an increase on the \u00a32,000 previous limit.<\/p>\n
We appreciate that operating a payroll can be a real burden for some smaller firms. You can, of course, save valuable business time by outsourcing some of your admin work. We\u2019d be more than happy to talk to you about how we could help.<\/p>\n","protected":false},"excerpt":{"rendered":"