Have YOU lost £1000s in HM Revenue & Customs online blunder? Here’s what to do
HM Revenue & Customs (HMRC) has apologised to British taxpayers for failing to take down a flawed tax relief calculator that gave users inaccurate and misleading advice.
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The UK taxman has admitted to the website errors that potentially caused many taxpayers to lose out on thousands of pounds of tax relief.
Although the calculator was taken down last night, officials have been aware of the inaccurate calculator for nearly two weeks.
The tax year ended on April 5th, however this year marks the last chance for earners to top up with pensions with £40,000 carried over from the 2016/16 tax year. Users of the HMRC’s misleading calculator were told that they couldn’t carry over the perks to the following year despite the taxman’s rules clearly stating otherwise.
A spokesperson for HMRC told City A.M: “We are sorry that the calculator isn’t working as it should in some cases. The calculator is no longer available as it is being updated.”
The best way to assess whether you have overpaid tax is to sit down with a financial advisor for a brief appointment and they will be able to run the figures for you.
Sir Steve Webb, a Lib Dem pensions minister under the Cameron coalition, said: “It is totally unacceptable for an official Government website to continue to operate when it contains blunders of this sort.
“It is beyond belief that they are knowingly allowing taxpayers to get incorrect information from their website and potentially to make major financial decisions on the strength of dodgy data.”
This is not the first time HMRC has been accused of a money-grabbing culture where taxpayers are punished for trusting the system to treat them fairly.
In January this year, Steve Webb, director of policy at Royal London said HMRC is “out of control”.
Mr Webb said: “It operates a system of ‘tax first, ask questions later’, presumably so that the Government can enjoy some extra interest until the money is claimed back.
“It is time to speak up for ordinary citizens who are forced to pay excessive amounts of tax and then go through the hassle of claiming it back. This is a system built around the needs of the Treasury and the bureaucracy, not one which puts people first.”
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What to do?
The most effective way of working out whether you’ve paid too much tax is to get out a calculator and figure out your tax liability and compare this to how much you have paid.
You’ll need your gross earnings to calculate your taxable income.
You need to calculate your tax liability using the correct rates of tax, and you can then deduct the tax you have already paid, for example, under Pay As You Earn (PAYE), to work out your tax overpayment or underpayment.
HMRC have a 'tax checker' tool on their website, however following today’s news concerned readers should consider taking a more active approach to calculating their tax bill and eligibility for a rebate.
Mark Abley, Managing of the Pension Review Service told Express.co.uk that if you fear something has gone wrong, help is at hand.
He said: "The best way to assess whether you have overpaid tax is to sit down with a financial advisor for a brief appointment and they will be able to run the figures for you.
"You probably need a pensions specialist as some of the tax computations used by HMRC can be complex by definition. It’s better to be safe than sorry."
Express.co.uk has contacted HMRC for comment.