HMRC has published an ‘Issue Briefing’ to help taxpayers understand ‘how PAYE underpayments happen’. The department is sending more than a million letters to taxpayers who did not pay enough tax under PAYE in 2010/11.
The underpayment will be ‘coded out’ in the vast majority of cases, HMRC said. ‘For those owing amounts up to £3,000, we can usually code out any underpayment. For those owing £3,000 and over, we will ask for direct payment. If the underpayment is less than £50, we will not collect it.’
Where the underpayment arose because the taxpayer received a state pension which HMRC was ‘unable to match to their tax record’, HMRC will ‘automatically’ spread collection by coding it out over the next three years.
HMRC has published an ‘Issue Briefing’ to help taxpayers understand ‘how PAYE underpayments happen’. The department is sending more than a million letters to taxpayers who did not pay enough tax under PAYE in 2010/11.
The underpayment will be ‘coded out’ in the vast majority of cases, HMRC said. ‘For those owing amounts up to £3,000, we can usually code out any underpayment. For those owing £3,000 and over, we will ask for direct payment. If the underpayment is less than £50, we will not collect it.’
Where the underpayment arose because the taxpayer received a state pension which HMRC was ‘unable to match to their tax record’, HMRC will ‘automatically’ spread collection by coding it out over the next three years.
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