Tax Errors Revealed
You may have heard that HMRC's computer has burst into life - somewhat belatedly they have arrived at a reconciliation of tax under and over paid for the two years ending 5 April 2009 and 5 April 2010.
The so-called errors have arisen because previous attempts at computerisation of tax payers' records failed to do this; to reach a formal reconciliation of all sources of incomes and allowances at the end of each tax year.
However, most of our clients will have submitted a self-assessment tax return that formalises this annual reconciliation. The notices of under or over payment currently being distributed by HMRC are likely to affect those who were not required to submit a return.
If by chance you do receive a notice, or if you have friends or business colleagues who receive a notice, there is one course of action to be taken, especially if an under payment has arisen - make sure that HMRC's calculations are correct!
Letters accompanied by a cheque will no doubt be banked no questions asked.
In certain circumstances underpayments will be recovered by adjusting your tax code for 2010-11. If your under payment is significant you will be required to pay the tax somewhat quicker, perhaps in just three months.
Please call if you need help for yourself or known associates either to check the tax charged is correct or advise on payment issues.