David Davis says plans that allow the taxman to raid people’s cash for unpaid tax should be ditched


As published in the Daily Mirror:
Millions facing £300 bill after tax blunder; More lose out despite a new £300m system

Millions of workers will have to give back an average of £300 to the taxman after paying too little – through no fault of their own.

HM Revenue and Customs took the wrong amount of tax from 5.5million workers through the Pay As You Earn system in 2013-14, figures show.

That is up from 5.2million in the previous year – despite a new £300million computer system which is designed to calculate payments more accurately.

An estimated 3.5million paid too little tax, and will now be asked to cough up the cash from future wage packets.

Around two million overpaid and can expect a rebate. HMRC said 41 million people pay tax through PAYE and that only a “small percentage” are calculated wrongly, mainly because they may have moved jobs.

Tory MP David Davis said the figures showed plans to allow the taxman to raid people’s cash for unpaid tax should be ditched. He said: “If ever there was a clear demonstration of why we should not allow the state to appropriate money from people’s bank accounts, this is it.”

The new IT system is supposed to use real-time information to monitor monthly payments to ensure they are correct.

Labour’s Shadow Treasury Minister er Shabana Mahmood said: “Millions of taxpayers have been badly let down by the government. Ministers spent nearly £300million on a new system, but we’re seeing more people paying the wrong amount of tax. HMRC needs to rectify these mistakes as soon as possible.”

An HMRC spokesman said: “There will always be a small percentage of the 41 million people in PAYE who have underpayments or overpayments. It could be because they’ve moved jobs, received different sources of income or benefits reported at the end of the year.”

5.5m taxpayers were charged wrong amount by the Revenue last year.