UK Government's PAYE Tax Blunder Hits the 18 Million Mark

Sept. 12, 2010 - PRLog -- Any talk surrounding the A19 after a bank holiday usually focuses around road works, traffic jams and closures but the A19 that’s on everyone’s lips this week is a little-used tax rule which could save you almost £1,500.


HM Revenue & Customs (HMRC) have admitted that nearly six million people have been paying the wrong amount of income tax via Pay As You Earn (PAYE) for the past two years.


Almost 1.4 million people including pensioners, new employees and also those with new employee benefits such as a company car will be asked to repay on average £1,428.


“This news could not have come at a worse time for many people” said a spokesperson for Bad Credit Loans 4 You, a UK specialist at sourcing loans for bad credit.

“Those unfortunate enough to be notified of the need to repay will have to start paying the amount back from April 2011 which coincides with an increase in National Insurance (NI) payments, a cut in tax credits and a rise in VAT to 20 percent”.


Those who have to repay the tax will be issued with a new code and deducted at an average of an extra £120 per month, which is a significant sum on its own, but added to the increases in NI and VAT, there are fears it will mean some people may encounter severe bad credit problems.


However, accountants have revealed a technicality called the A19: Extra-Statutory Concession, which under its terms, HMRC would have to write off any money owed.


The concession states that HMRC will not pursue the matter if the victim “could reasonably have believed that his or her tax affairs were in order”, and with no limit to the amount which can be written off under this concession, it could help many stay clear of any bad credit problems.


Accountants have also been quick to mention a 12 month rule which could also apply, enabling the outstanding tax to be written off if the victim was informed of the discrepancy by HMRC more than one year after the end of the tax year that the taxpayer’s information was provided.


Although this news may bring tough bad credit times on many people, an estimated 4.3million will benefit from an average tax refund of £419 in the form of a cheque over the coming weeks.


The Tax Code error has been blamed on a new £140 million computer system which contains 12 old computer systems merged in to one, and now keeps a record of our incomes.


Your Tax Code determines what rates of tax you should pay and when your personal allowance kicks in, but the new system gave millions of people the wrong Tax Code, something which parts of the media have claimed HMRC knew about as early as September 2009.


The first 45,000 letters informing people of their tax circumstances will be posted through letterboxes this week, with the rest due to be issued before Christmas.


“We recommend that anyone who receives a letter from HMRC, containing good or bad news, should treat it with caution”.


“The information within the letter should not be taken as correct nor already agreed”, stated the spokesperson for Bad Credit Loans 4 You, “people are entitled to make a claim not to repay the tax and we recommend that they do”.


“We have been pointing anyone who has expressed concerns about their position to either the Low Incomes Tax Reform Group (LITRG) or to TaxAid for advice”.


The LITRG is an initiative of the Chartered Institute of Taxation which gives a voice to those people who are currently unable to afford to pay for tax advice, and are planning to publish information on their website http://www.litrg.org.uk about how to deal with the Tax Code error to stop any bad credit.


Similarly, TaxAid http://www.taxaid.org.uk is a registered UK charity that provides free independent and confidential tax advice.
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Bad Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading. The company is also covered by the Financial Ombudsman.

Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.

For help, phone 0800 011 4503 or visit
http://www.bad-credit-loans-4-you.co.uk    

Notes for Editor:

http://www.bad-credit-loans-4-you.co.uk    

Loans 4 You of London Ltd
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Bad Credit Loans 4 You brings together a team of specialists that together offers over 50 years of expertise to help applicants gain the bad credit unsecured loans they need.

From its UK head office in Monks Brook, Loans 4 You operates across Britain, sourcing loans for people with bad credit.

Bad Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading. The company is also covered by the Financial Ombudsman.

Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.

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Loans 4 You helps people source the personal loan they need. Loans 4 You can help people with bad credit history, poor credit history and obviously good credit history, our senior managment have over 50 years collective experience in the finance field.