The recent admission by the HMRC that the PAYE tax codes of up to 6 million UK citizens have been incorrect over the last two tax years will bring a nasty shock to as many as 1.4 million taxpayers. Many people will receive letters before Christmas informing them that they owe Her Majesty’s Customs and Revenue what could add up to a debt of as much as a full month’s salary. The HMRC errors appear to have come to light when a new computer system was recently introduced.

Tory Wagg, Senior Chartered Management Accountant at Panthera Accounting in Grove said ‘This is a genuine concern for many of our customers, particularly in the current economic climate where savings rates have diminished, jobs are at risk and people have less spare cash to hand. A few have already contacted us to ask how they can best meet their payment and these seem to be for sums of an average £1380.’

‘We have issued a letter to our customers, reassuring them that we always check that their tax code matches their personal circumstances so hopefully many will avoid the pain of an unexpected demand. We are offering advice on what to do should this happen and in some cases individuals may benefit from a festive windfall – around 4.3 million people across the UK will receive a repayment. We are asking people not to panic as there are a number of things we can do to help, such as organising a payment plan for them or requesting that the outstanding amount is collected through their 2011/2012 tax code.’

Tory also highlighted that the tax bungle gives fraudsters the perfect excuse to operate by sending fake e-mails to individuals demanding instant tax payments. Her advice is to ignore any e-mail communications about tax codes and to consult with an accounting expert when a letter arrives.