HM Revenue & Customs has admitted that nearly one in eight people are paying the wrong amount of tax. The National Audit Office released their report on the Revenue earlier this week.
The departments Internal Audit Office highlighted widespread errors in PAYE. It is estimated that these problems have resulted in around £575 million pa of tax due, which is not pursued by the Revenue, and taxpayers had not been notified of around £295 million refundable to them.
The main cause of these mistakes was the Departments' failure to calculate correctly tax liabilities where people had more than one source of income.
HM Revenue & Customs believe that 'other priorities' had taken precedence over PAYE as the system had been working well, but now the same system was incapable of dealing with over 10% of all taxpayers income correctly.
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