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CIOT Urges Taxpayers To Check Their PAYE Coding

by Jason Gorringe, Tax-News.com, London

15 May 2007


The Chartered Institute of Taxation (CIOT) on Monday urged UK taxpayers to check their PAYE coding notices in order to ensure that they are paying the right amount of tax.

According to the Institute:

"Many taxpayers do not know they may be paying more tax than they should. Others may not be paying as much as they should and may not realise that they have a responsibility to let HMRC know."

John Cullinane, President of The Chartered Institute of Taxation (CIOT), went on to explain that:

“Those taxpayers who complete a self-assessment tax form are given an explicit opportunity to state how much tax they should pay. For everyone else the PAYE code is effectively their tax return - yet most UK taxpayers assume the PAYE code and coding notices are correct. This is like signing your tax return without reading it.”

In recent research undertaken on behalf of the CIOT, 47% of UK taxpayers polled said they had never checked to see if their PAYE code is correct. 42% revealed that they found it ‘very’ or ‘fairly’ difficult to understand if they were paying the right amount of tax.

John Cullinane added:

“The majority of people in the UK have most of their tax collected through PAYE. A December 2006 National Audit Office report indicated that HMRC estimated that last year taxpayers may have overpaid around GBP500 million via PAYE, and that GBP1 billion of tax may have been underpaid. They estimate that 5.7 million taxpayers may not be paying the right amount of tax."

"This is why the CIOT is bringing the issue to the public’s attention now. We agree with HMRC that it is vital for people to keep their tax records and also urge them to make sure they understand their tax code.”


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