As many as 5,000 South Yorkshire pensioners may have underpaid their PAYE in the last tax year because of HM revenue & Customs’ latest blunder, according to a Sheffield tax expert.
Paul Hanson, personal tax manager with leading independent accountants Barber Harrison & Platt, said: “This is the third year running that State Pension has been omitted from some PAYE coding notices. In the previous two years those affected may have had their underpayment waived under extra statutory concessions, but this can only apply if the problem is discovered after the end of the tax year in question. The latest mistake was discovered during the tax year and, as such, the underpayment of tax will not be waived.”
Mr Hanson says HMRC has promised those affected will be given an extended period of three years to repay the tax, but he advises pensioners to check their codes and contact HMRC if this three year period is not granted.
HMRC has said PAYE coding notices issued for 2011/12 correctly include restrictions for State Pension, but Mr Hanson is urging pensioners to check their notices.