Back in early September we posted a blog (entitled "HMRC Chaos") about the first batch of letters from HMRC to the 1.4 million taxpayers who had underpaid £2 billion of PAYE tax due to errors in their Coding Notices. We subsequently reported that the shambles had led to another 4.1 million taxpayers overpaying an approximate £1.8 billion in PAYE tax for the same period.
That first batch of letters in September was a pilot; we understand that HMRC is stepping up its efforts and will be sending hundreds of thousands of letters each week from now until Christmas. That's 5 and a half million letters and those taxpayers that receive a letter from HMRC will now have the distinctly unpalatable "pleasure" of playing roulette with their post as they wait to see whether they owe tax or are owed tax back. The average underpayment is c.£1,400. The average overpayment is c.£400.
The timing could hardly be worse as families try to put cash aside for the Christmas period. If you do receive a letter from HMRC advising that you have underpaid PAYE you should see our guidance here and here.