news story

1st February 2010

Steve Webb MP Offers Help to Local Residents over Confusing Tax Codes

Local MP Steve Webb is offering help and advice to his constituents as baffling new tax codes leave many at risk of paying too much on their earnings.

HM Revenue and Customs have admitted that following the introduction of a new computer system some people are being given the wrong tax codes. If these are not corrected people may end up paying too much money in the new tax year which begins in April.

People who have changed jobs or those with more than one job are especially at risk of receiving an incorrect code.

The MP is concerned that many people will simply assume that a notice issued by the Inland Revenue must be correct, and few understand the tax system well enough to challenge an official notice.

Each year individuals under pension age are allowed to earn £6475 without paying any tax. Where someone has more than one job, that tax allowance can be split between jobs so that each employer gives a certain amount tax-free and the employee pays tax on the rest. The problem with some of the new coding notices is that HMRC are in some cases splitting the tax code for 2010/11 between employers even if the individual no longer works for both – meaning that many could be left paying too much tax.

Steve Webb MP is asking anyone in his Northavon constituency who may be concerned about their notice of coding (which will be received in the post in the coming weeks) to contact him. He will provide help and advice and, where necessary, take up their concerns with HMRC.

Commenting, Steve Webb MP said that:

"Once again a Government computer bungle is causing confusion and inconvenience for thousands of people. The tax system is complicated enough as it is, without people being sent incorrect information. My concern is that many people will not realise that HMRC have got things wrong and may end up paying too much tax. I hope that anyone in my area who is concerned will get in touch with me, so that we can get to the bottom of this problem".