Six million to get tax rebate as HMRC overhauls its IT systems

SIX MILLION UK workers will see a total £2.5m of their tax money repaid by the government as a new IT system corrects overpayments dating back to 2003, HMRC said yesterday.

The repayments will be on average about £300 per person with any interest generated on top of that, and will be returned automatically any time until the end of next year.

But another one million people will be sent an average £600 bill that could hit more than £3,000. Anyone owing a large sum will be contacted directly to work out a way to repay in instalments.

The mispayments cover tax taken between 2003 and 2007 and have come to light only after the Inland Revenue installed a new IT system that has made it easier to find errors.

“Money that is owed going back many years is now going to be automatically paid back as we get the tax system up to scratch. We are getting cases that were left unreconciled up to date as quickly as possible,” an HMRC spokesman said.

But PwC tax partner Alex Henderson describe PAYE as a “blunt instrument” that “worked fine when people spent their careers in one firm, but does not suit the needs of today’s workers.”