PAYE Errors: Not for Employers to Fix
Small-business owners are not responsible for resolving the tax problems that found six million taxpayers paying the wrong amount, the Association of Chartered Certified Accountants (ACCA) has said.
HM Revenue & Customs is sending out letters to 4.3 million people saying that they have paid too much tax after a new computer system calculated the wrong PAYE codes. Simultaneously, it is trying to recoup £2 billion from 1.4 million people who were undercharged.
ACCA head of taxation, Chas Roy-Chowdhury, said:
"It’s not the employer’s responsibility to correct this. Employers will need to implement the new coding notice which they will receive once a code has been agreed by HMRC and the employee concerned, but other than that they have no obligations."
"It’s down to the employee to check they have been given the right tax code, and if they are worried they can call HMRC," he added.
Repayments to those that have been overcharged average £420 and will be made via changes to employees’ tax codes in 2011-12. Extra charges, averaging £1,380, will also be recovered through an altered tax code.
BDO Stoy Hayward senior tax partner, Stephen Herring, said that employers can help HMRC to ensure their employees’ tax codes are correct by passing P45s promptly from new recruits to payroll staff.