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Are You Paying Too Much Tax? Join in the debate

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Eamonn Walsh | 15:39 UK time, Monday, 8 November 2010

Research this week reveals surprising among UK workers.

As HM Revenue and Customs (HMRC) prepares to send out than the six million it originally planned over miscalculations on pay-as-you-earn tax accounts dating back to 2004, reveals the continuing chaos inside HMRC.

With large cuts just announced to HMRC's budget, insiders say the much-vaunted new computer system is making a bad situation worse with billions in tax owed to the revenue having to be written off because of mistakes.

Reporter Adam Shaw takes tax experts on the road to check people's tax codes and hears first hand from angry taxpayers and from whistleblowers inside HMRC who complain that mismanagement, waste and staff shortages mean they're providing a poor service to taxpayers across the country.

He also braved the autumnal wind to give us a breezy, bitesized guide to what you should do if you receive a , which you can watch here:

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We welcome your comments on 'Are You Paying Too Much Tax?' Join in the debate by leaving your message here on the Panorama blog.

Comments

  • Comment number 1.

    Join in the debate on 'Are You Paying Too Much Tax?' by leaving your comment here.

  • Comment number 2.

    I am watching with interest the program and feel slightly easier that i am not the only one out there.

    I also find that a lot of the peoples comments on the show are the same as mine, HMRC are completely incompetent and cannot communicate with the average tax payer.

    I received a bill for over Β£4,000 last month and this happened after receiveing a similar bill last March and in the interim I received 6 tax code notice!!

    I have written complaining to HMRC and was simply told to send it recorded delivery as they wouldn't confirm if they had received it otherwirse. They also said they had no record of my 30+ calls to them last year!!! Oh and they said they would respond in 3 months!

    It's a sham and a complete disrace that over Β£1million people face the same situ as me so close to Christmas.....

    Hopefully this program will bring this all to the forefront of the government and maybe we can all get our issues sorted!!!

  • Comment number 3.

    well i had a letter off the hmrc stating that i owed them Β£536, im 20 years old and i have worked for 3 year solid with holding down to part time jobs i don't belive it is my fault if they think i havn't paid tax they gave me two different tax codes that is purly down to them not me. I don't really understand any of this tax stuff but i no i can't afford this ammount of money.

  • Comment number 4.

    As a chartered accountant who remembers and mourns the lost days of eloquent, articulate and most efficient letters from HMRC officers I am glad this shambles has been exposed. I rarely use the telephone service because it takes too long, but these days it is also impossible to obtain replies to letters. My advice is to submit tax returns - annoying but this is the only part of the HMRC computer system which works.

  • Comment number 5.

    The tax code for my service pension was changed by HMRC from 210 to NT on 31/8/2010. It made me jump for joy as I thought my pension was being changed to a back dated RN Invaliding pension. I was made redundant in 1993 from the RN after serving 18 years. I have been fighting for an invaliding pension since 2008 as I now realise I suffered a severe brain injury in 1977 and I received no rehabilitative or medical treatment from the RN for it. I have received a War Disability Pension back dated to 1993 for my injury.
    6 Weeks of phone calls to HMRC and various MOD locations and the HMRC have recently told me they have made a mistake and my tax code has been reverted to 210 and they are going to claw back the tax rebate they have just given me.
    My fight goes on to get my invaliding pension.

  • Comment number 6.

    I was sad to see the programme did not challenge the misleading Government statement that they are to devote an extra Β£900 million to tackling tax evasion and avoidance. They are not. They intend to cut HMRC bu over Β£1 billion, and cut staff by 13,000. The Β£900 million is simply a further cut that they have decided to forgo!

    You are right to say the whole problem is the way that HMRC staff numbers have ben cut. PAYE is the best system to collect tax, but the problem is HMRC cut too many staff to give a decent level of service.

  • Comment number 7.

    A very interesting programm, but I think you could have explained an example of how people like myself, a pensioner recieving a private and state pension, how thier tax code is worked out. By adding the two pensions together in the annual form, and deducting the personal allownce, the remaining figure is the tax code, and the private pension is taxed on this. I am sure this would be more helpful than a lot of the content of the programm.

  • Comment number 8.

    We are concerned that a letter we sent 11 days ago to HMRC by recorded delivery, as advised, has not yet been signed for.If you can't get through on the phone and nobody gets to read letters sent as advised in information that comes with the P800, how are we meant to sort all this out? Thank you to the Panorama team for an excellent programme.

  • Comment number 9.

    It’s a disgrace. I had to stop working to look after my daughter because working tax credit was stopped without a single explanation. The so called child benefit has stopped since November last year and we do not even mention it at the moment because all our applications get lost in the HMR revenue system. One day someone will tell you that he can see application on the system, the next day another one will tell you that actually we have not yet received your applications.
    No one from HMR revenue calls centre could explain to me what was wrong with our application. I have been promised that someone will call me to explain and now it’s been two months nobody has contacted us.
    Fanny enough one of the employees at the local HMR revenue admitted to me that majority of employees does not understand how system works and it will take time to find someone to fixe my query.
    After watching PANORAMA on Βι¶ΉΤΌΕΔ and how I have been treated, then I have understood how the system is rotten.
    I have no trust in HMR revenue and I am always scared to use their money, thinking that they may come back to ask me to pay back.
    This is a failed system to honest

  • Comment number 10.

    The new computer system was introduced in April 2008 and I have been in dispute with them since then.

    Having submitted my Online Self Assessment I was told that I had underpaid tax by Β£90 which was nothing unusual however it also stated that I owed Β£674.74 for a student loan I had taken out in April 2008 a coincidence. I am a 79 year old pesioner and I have no knowledge of any college or University that runs courses on how to use a zimmer frame. I naturally wrote complaining and spent three months communicating with no less than four different departments of the HMRC before finally someone calculated my return manually. His conclusion was that I did not owe them Β£90 but in fact I had overpaid tax by Β£5.50 for which he sent a cheque. The student loan was deemed a computer error.

    When doing my return for 2009-10 I decided to preview it before submitting it and I found so many errors that I refused to submit it and yet again wrote to them. Firstly my NET interest had been put into my income on which I would pay tax even though tax had been deducted. And I was told I owed them Β£1,473.65 which has to be paid by the 31st January 2011. It is now November and I still have not submitted a return. I have now received a letter giving precise details of my income and it transpires that HMRC now owe me Β£1.94.

    Apart from four cases your excellent programme aimed at one theme, the HMRC were going to claim money which their new computer claims is owed. I dispute this and in my opinion the new computer system is flawed. Are we to believe that hundreds of HMRC employees and thousands of Tax Accountants have been calculating tax on a daily basis but have not noticed what the HMRC initially claimed was a calculation error? I even communicated with David Gauke asking that he set aside 20 of his HMRC staff to randomly select tax returns and calculate them manually. He told me this was not possible because the new computer system consisted of two computers and it would not be comparing like for like. Strange when you consider my 2008-9 and now my 2009-10 returns have been calculated manually and the computer has been in existence sincee April 2008.

    Computers are moronic pieces of technology which do exactly as they are told. If they are given the wrong information they will provide the wrong answers and it is inconceivable that 9 million people owe the Treasury tax. Calculating ones tax is not rocket science.

    This is another New Labour botched idea. We had the NHS computer which was going to put GP's in visual contact with Consultants and keep millions of patients records that failed dismally. We have the South-East Air Traffic Control computer that has been in the making for no less than 14 years, has cost billions and is still refused to be used by ATC because they consider it dsangeroud. Now we haved the HMRC fiasco.

    The computer programme is flawed and the only solution is to scrap it and go back to the old programme which worked brilliantly.

  • Comment number 11.

    Mike I am in the same boat as you I have a company pension and a State Pension which is now referred to as a Contributed Benefit by the way.

    To try to answer your quesstion. Between the age of 65-79 your tax code will be preceeded by a 'T'. Firstly they add all your income then they deduct your State Pension from the Personal allowance and the resulting figure denotes how much you can earn before tax, for example it may show T34 which means you can earn Β£340 before tax.

    However when you reach the age of 75 your Personal Allowance is Earnings Related. Each year the Treasury calculate how much is required to pay all pensions and set a figure. This year it is Β£22,900 so 50% of everything you earn above that figure is deducted from your Personal Allowance and having done that they then deduct your State Pension. When you reach the age of 80 you receive an age related allowance and your code prefix is changed from 'T' to 'K' but the same calculations are made.

    I always assumed my NI contributions while at work were paid before tax and accepted that the State Pension was UNEARNED INCOME but I now discover the NI contributions are made from Taxable Income. So it means that you are now paying tax on your State Pension twice.

    Just one thing to remember YOU CANT WIN

    I have had three coding notices this year the last one was K-Β£830. I would be better off had I not had a Company Pension and simply had the State Pension with all the benefits that go with it. My most recent letter, and there are loads of them I can assure you, tells me my code for this year is K14 which means I shall be taxed on everyone above Β£140 a year.

  • Comment number 12.

    I received a Tax bill for just under Β£1,400. My tax code changed in April and I queried this with my employer who could not explain it. I have been in my job for 9 years and the only thing that has changed is 5 years ago I stopped claiming Child & working tax credits. Apparently my tax code should have changed then but because the Inland Revenue did not let my employer know and they did not question it I am now left with this bill. I have written to them to say that I am already paying back Β£50 a month back since my Tax code changed and if they take anymore I will have to give up my job as I cannot afford to pay anymore. I am already in debt with other things and this one has tipped the scale. I have considered bankrupcy and suicide but neither are worth it. I am in complete despair. I can not under any circumstances cope with this anymore. All I can end with is nice going Inland Revenue I hope you are proud.

  • Comment number 13.

    I was involved in a tax related matter. I was literally taken to the cleaners by the tax man. Simply because there was no support available. I lacked the knowledge, and There was no legal advice or help and if there was it cost an absolute fortune. The tax inspector was aware of this and refused to listen. He had my home as his target, and i did not stand a chance.

    This may be difficult to understand for many but i am a very simplistic individual. I know have a strong belief that there is no justice for those of us that are of an innocent nature.

    I believe the tax man has no sense of fair play and if there is money to be made all justice and fairness goes out the window.

  • Comment number 14.

    Yes and having watched Panorama and the Channel 4 programme about the Trillion Pound Debt the UK has, I was horrified! I earn just 15p and hour over the minimum wage. I work 24 hours a week and get my wages topped up with tax credits. You would have thought that the Β£5-Β£6 a week I pay, due to low wages was not much? However, when you take in VAT and other taxes, they said I would actually be paying an awful lot more, to the extent that I am actually paying thousands in tax a year and I cannot afford it.

    You know what? I think they should rein in the government. They should do what they did in Hong Kong and give us NO corporation tax, NO capital gains tax, income tax at 20% (but only for the richest) and let us pay for our hospitals and old age with insurance. That way - I'll make my own choices and my own decisions without government interference.

  • Comment number 15.

    Why cant the government advertise being overweight the same as the effects of smoking, rather than charging extra money for fatty foods?There is already enough tax on everything as there is .People are already struggling to support themselves without struggling to eat and feed their chidren on top of it. The government take the mick out of uk citizens, charging for everything.

  • Comment number 16.

    yes we r,rip off britian

  • Comment number 17.

    I spent a frustrating afternoon on the phone to them, only to be told they had no details of any of my allowances. This was despite spending a year in 2007 arguing with them about a fundamental review of my taxation they had undertaken. I gave them all my details - including pension payments - only to be informed that my work pension was deducted at source and I was not eligible for tax relief on them.

    Guess what? I have just found out that they are eligible. So I have been paying tax on them for years. Now they say they have no such information. If this was my company, I would sack the lot of them and start again! Instead, I will probably have another frustrating year "jumping through their hoops" - only to be told that they have lost all my details.

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