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UK PAYE Errors Rise, Despite New RTI System

by Robert Lee, Tax-News.com, London

25 June 2014


3.5m Brits paid too little tax through the pay-as-you-earn (PAYE) system in 2013-14, according to estimates from HM Revenue and Customs.

The UK200Group, a collective of independent accountancy and law firms, expressed its disappointment at the figure. It said that a total of 5.5 million people paid the wrong amount of tax throughout the year, up from the 5.2 million recorded in 2012-13. Those who underpaid will have to pay back the money in future years.

The Group criticized the new GBP270m (USD459.2m) Real Time Information (RTI) program for failing to deliver promised improvements to the system's accuracy.

Jonathan Russell, partner at member firm ReesRussell, said: "It is staggering considering the amount spent on the new RTI scheme that the number of incorrect tax payments has increased rather than decreased. An optimist might suggest that RTI has just helped identify more of those that were incorrect and there are still a large number of unidentified errors in earlier years, whilst cynics will say RTI has been an unmitigated failure.

"There will always be small year-end adjustments, but this is over 15 percent of those in work, which when you consider many of those will be self-employed and therefore not in this PAYE system the number of people where their tax is wrong is simply staggering and possibly highlights how overly complex our tax and benefit system is."

TAGS: tax | law | United Kingdom | tax authority | revenue statistics | tax reform | trade association | trade | individual income tax

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