According to the UK's National Audit Office (NAO) which released a report on Monday, the country's Pay As You Earn (PAYE) tax collection system is fundamentally flawed, with around one in eight people paying the wrong amount of tax.
The report revealed that in addition to this, UK taxpayers are missing out on rebates worth £295 million, whilst HM Revenue and Customs is failing to collect around £575 million via the PAYE system.
Commenting on the figures gathered by the NAO, Auditor General and Comptroller, Sir John Bourn suggested that the mistakes resulted from HMRC's "failure to finalise and calculate correctly the tax liabilities where people had more than one source of employment income".
He went on to add that:
"Different systems in place, and a lack of communication between those systems, means that the department did not have a whole customer view."
The NAO report also strongly criticised the tax authority's handling of the tax credit chaos which saw nearly 2 million families overpaid, and many forced to pay the excess amount back to the department.
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