Bill Dodwell, head of tax policy at Deloitte, is critical of HMRC's failure to address a computation problem on self assessment, which has resulted in miscaluations of tax liability and hints that many taxpayers will end up paying the wrong tax and may even have to revert to filing paper tax returns
We are at the start of the new tax year, when personal allowances and tax thresholds change (apart from residents in Scotland, where the higher rate threshold is frozen at last year’s level). Lots of us may start logging into our new personal tax accounts to find out more about what the new year will bring.
The challenge, though, is that HMRC’s calculation engine is throwing up lots of errors and so not everyone will receive the correct information. The personal tax account is marked as ‘beta’, which on the evidence is a fair description of a service that millions hope will become a much better way to communicate with our tax authority.
For example, I have seen an example of an annuity, which commenced in 2016-17. Seven identical amounts of £700 are shown in the PAYE record with an additional payment in the first month of £1,400. The human in all of us will recognise that payment started late and that the annuity covered nine months. The amounts total £6,300 with a final payment on 1 April.
