HMRC Tax Code Fiasco

It has been widely reported over the last year on the number of incorrect tax codes issued by HMRC.

Some 4 million tax payers are believed to have overpaid tax as a result of incorrect code notices being issued. That may be good news for those who are due tax refunds, however, it doesn't end there. A reported 1.4 Million tax payers have underpaid tax of £1,500 on average.

For those who have underpaid amounts of tax of less than £2,000 HMRC will make adjustments to their tax codes next tax year to collect the money. Should someone owe more than £2,000 the facility to have the amount collected via your tax code is not available, HMRC have advised that those affected will be given time to pay.

It is not just employed individuals who have been affected, pensioners have suffered too. Tax codes are difficult enough to understand even for the best of us, for many pensioners their tax codes maybe near impossible to understand, namely because tax codes for pensioners tend to be more complicated than those for regular employees due to age-allowances, restrictions for State Pension and Married Couples Allowance.

WARNING: as a result of the problems with under/overpaid tax a raft of ‘phishing’ websites have arisen. These sites look like HMRC, some of them are almost identical to HMRC’s official website. These bogus websites operate by sending out emails to people advising they have a tax refund, the email will contain a link which will take you to a page that looks like an official HMRC page. You will be asked to provide your credit/debit card details, name, address, date of birth etc, basically everything that is needed to steal money from you.

Protect yourself and your details by following this guidance.

1. Foremost, HMRC would never contact you by email in event you were due a refund. They would only ever contact you by posted correspondence, the letter will give you the option of receiving your money by cheque or by bank payment, for this you would give your sort code and account number, you would not provide any card details.
2. Should you receive an email from ‘HMRC’ you should forward it on to This e-mail address is being protected from spambots. You need JavaScript enabled to view it who will close down the bogus website and prosecute those behind it.
3. In the event you have already submitted your details to a bogus website you should send details to This e-mail address is being protected from spambots. You need JavaScript enabled to view it Do not divulage the detail of what you sent, simply say what you sent, for example, ‘I have sent my name, address, National Insurance number, bank account’, etc
4. Warn your friend and family about such bogus sites and tell them to follow the above guidance.