People contacted by HM Revenue and Customs (HMRC) in the coming weeks about the over or underpayment of tax should consider challenging the taxman, according to a leading local tax expert.
John Endacott, tax partner at Francis Clark chartered accountants, said the revelation that millions of people had paid the wrong amount of tax did not mean that the Revenue had actually got its sums right, and could still be open to challenge.
HMRC has confirmed that six million people will receive an average tax refund of £400 having been overcharged to the tune of £2.5 billion.
But another 1.2 million people – including 150,000 pensioners – will have to fork out around £600 each because HMRC has undercharged them a total of £720 million. These people will have the option of settling in full or paying gradually through their tax code.
Endacott said: “Once again HMRC is making headlines for all the wrong reasons and they are reaping the whirlwind from historic errors stretching back many years.
“Our advice to anyone who is contacted by HMRC is first of all do not ignore it because you could be storing up trouble if you do.
“For anyone issued with a demand it’s important to check whether the figures add up and your accountant can help you with this. Just because the Revenue has issued a demand does not mean that they are right because often it is based on poor information. We dealt with a demand for £8k for one client when in fact she was due a refund.
“Similarly, if you receive a rebate then make sure that you have received everything to which you are entitled. We have handled numerous cases where we have secured bigger refunds because HMRC got their sums wrong.”