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Six million affected by tax blunder

Six million affected by tax blunder

Category: Money

Updated: 06/09/2010
First Published: 06/09/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A computer error has meant that around six million people in the UK could have been paying the wrong amount of tax over the past two years.

While some will have to make up the shortfall which has occurred through no fault of their own, others will be receiving a cheque in the post reimbursing the extra tax they have paid.

The Treasury said that some 1.4 million will have underpaid on their tax as a result of the problem.

In total, around £2 billion is owed to the Government purse, working out at an average underpayment of around £1,500 per affected person.

As the Treasury attempts to recoup the money it is owed, some people will be hit with a higher tax bill over the coming months.

However, there will be a welcome surprise for around 4.3 million taxpayers who it has been found have been overpaying their tax.

Rebates totalling £1.8 billion are thought to be owed to those who have paid more than they should, averaging out at around £418 per person.

Letters to those affected are expected to start landing on people's doormats this week, although it is likely to be Christmas before everyone caught up in the blunder has been notified.

If you're lucky enough to have a sizeable cheque from the Treasury pushed through your letterbox in the coming months, putting it straight into a savings account is likely to be the best thing that you can do.

It is effectively bonus money that you never knew you had anyway, so stashing it away for a rainy day seems the sensible option.

Some fantastic cash ISA accounts are currently available from names such as Nationwide, Santander, Halifax, Sainsbury's Finance and Triodos, all of which are ideal to play host to your windfall.

The Nationwide e-ISA currently pays 2.75%, as does the Santander Direct ISA, while Sainsbury's Finance Cash ISA has a rate of 2.60% at present, along with the Halifax Direct ISA Reward.

If ethical issues are important to you, then the Triodos Online Cash ISA currently pays 2.00%.

Find the best savings rates for you - Compare savings accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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