Bureau Recommends: HMRC failures affect seven million

HMRC have made ‘the biggest tax blunder in a generation’, affecting seven million people, an investigation by the Daily Mail reveals today.

This is the latest in a series of errors caused by the beleaguered HM Revenue & Customs, and means that 1.2 million people will receive letters in coming weeks informing them that they have underpaid their taxes.

A further six million are to be given a tax rebate, amounting to a total of £2.5 billion.

HMRC was in the spotlight last week after it was revealed that Dave Hartnett, the Revenue’s permanent secretary on tax, had ‘shaken hands’ with Goldman Sachs on a deal on their tax affairs, relieving them of up to £8 million.

Today’s news means that the Government will be forced to pay back around £750 million.

Conservative MP Jesse Norman told the Mail:

‘This news will come as a nasty surprise to some people, and as a nasty surprise to the Government that will have to find the money for millions of reimbursements.’

The errors have arisen due to the complex ‘pay as you earn’ (PAYE) system, implemented in 2009.

Software problems with the system have resulted in lasting and costly losses for HMRC, and caused uncertainty and inconvenience for the taxpayer.

Read the full report here.