Income tax overpayments

Approximately 1m people are being advised to check their tax returns because of widespread errors by HM Revenue & Customs (HMRC). The National Audit Office recently said that in the 2006/07 tax year, HMRC miscalculated income tax in 5 per cent of cases, or 1m returns.

Taxpayers underpaid by £125m, but overpaid by £175m. HMRC pay interest of only 3 per cent on overpaid tax against the 7.5 per cent it charges if you underpay. The average underpayment was £250, and the typical overpayment was about £290.

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Article date: 08.07