Tax rebates for millions, but others to be billed - Money - News |

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Tax rebates for millions, but others to be billed

Tax rebates for millions, but others to be billed

Category: Money

Updated: 19/10/2011
First Published: 19/10/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Millions of people are to receive rebates from HM Revenue & Customs (HMRC) for paying too much tax but many others are to be hit with bills having underpaid.

It is estimated that six million people will be paid back an average of £400 because they have paid back more tax than they owe.

But a million more people will be hit with an unwelcome tax bill, with letters expected to be sent out in the next couple of months.

It is thought that people that have underpaid will be asked to pay back between £500 and £600.

The problems have been caused by a new computer system at HMRC, which also saw millions of people either owing or being owed money last year.

In fact, the repayments or shortfalls relate back to the 2007-08 financial year, with the effort to correct the errors set to cost the Government around £2 billion.

It is hoped that the number of inaccurate cases will diminish as problems with the new computer system are ironed out.

People that receive a letter telling them they are entitled to a rebate can expect to receive a cheque in the following two weeks.

But those facing repaying more tax will not be expected to do so in one hit.

Most will have instalments taken from their tax codes in 12 monthly instalments, beginning in April 2012, although shortfalls can be paid back over two or three years in some circumstances.

Those unfortunate enough to receive a bill for more than £3,000 will be contacted directly by HMRC about how they can pay back monies owed.

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 Any products featured may be withdrawn by their provider or changed at any time.