The process of reconciling employer and employee tax accounts happens each year and results in millions of people receiving notifications of refunds or the need to pay more tax if they have been on the wrong tax code previously; with HMRC estimating that 3.5 million could be in line for a tax refund, whilst a further 1.6 million will be advised they have underpaid tax throughout the year.
It has expected that those who are due a rebate will get an average windfall of £379, while the typical shortfall for those who have not paid enough is £537, PAYE adjustments for the tax year 2011/2012.
Stephen Banyard, acting director general for personal tax, said: "We are pleased that we are able to start this process more quickly than in previous years, giving money back to those we owe and delivering certainty to those with something to pay.
"We are improving the PAYE system further through the introduction of Real Time Information (RTI), which will make it easier for employers and pension providers to administer as they will tell HMRC about PAYE payments at the time they are made - as opposed to only at the end of the year - reducing the need for corrective actions at a later stage."
The letters advising taxpayers that they are either due a tax rebate or are required to pay additional tax are to be sent out from May 17th 2012, with the last being sent in October 2012; and HMRC have said that anyone who receives a letter doesn’t need to do anything, as any tax owed will be taken throughout the year via an alteration in the tax code.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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