Why the tax blunders are inexcusable

It’s a story that’s going to run and run for a little while yet. Last weekend, HMRC announced that it was going to be sending out millions of letters to taxpayers, informing them they’d either overpaid or, far worse, underpaid their income tax since 2008 – with an average payback of £1400 required.

Cue righteous outrage from the media bewildered that so many mistakes could have been made. HMRC revealed that the mistakes had come because they’d finally started to computerise records, rather than manually reconciling figures at the end of tax years (nothing like a bit of human error, eh?).

Over the past week, HMRC has changed its stance on more than once occasion. Initially, it said everyone would have to pay back within 12 months, before being forced to admit that something called extra-statutory concession A19 effectively means that anyone who had provided the correct information to their employer should probably not have to pay.

Then, as the week wore on, it was agreed that people with less than £300 to pay would have their bills waived, while others could spread payments over 3 years.

But then came the straw that broke the camel’s back, when the chief tax official Dave Hartnett initially refused to apologise to those taxpayers who would be getting a nasty surprise in the post, before quickly backtracking (no doubt after someone higher up the food chain gave him a rollicking).

So much for the facts. Surely, the main point here is the remarkable hypocrisy from HMRC. As taxpayers, we’re meant to get things right first time and pay up as soon as we can. Suddenly, HMRC admits to errors but doesn’t (initially anyway) want to apologise and doesn’t think it’s done anything really wrong.

For me, the big problem is that taxpayers who are being targeted aren’t those who file their own tax returns or the self-employed – no, it’s the regular full-time employees who have been screwed – either for paying too much, or too little. The PAYE system is meant to mitigate against tax problems – specifically underpayments – and is meant to take the onus off of the employee and put it onto the employer.

That millions are now being told that someone else screwed up, but they have to pay the price is indefensible.

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