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Taxpayers should receive an early tax rebate this year

Taxpayers should receive an early tax rebate this year

Taxpayers who are due to receive a refund from HMRC could find it arrives earlier than usual this year.

The Revenue started its annual reconciliation of employer PAYE returns for the tax year 2011-12 yesterday and according to HMRC, it will now be in a position to start issuing tax refunds.

As many as 3.5 million taxpayers could receive a rebate averaging £379. However, a further 1.6 million taxpayers will discover that they underpaid PAYE last year and they will have to repay £537 on average. In the majority of cases, this money will be clawed back through an adjustment to their tax code.

Every year, the reconciliation process discovers that around 15% of taxpayers have paid the wrong amount of tax in the previous financial year. There are various reasons for this, including changing jobs frequently, having more than one job at a time and receiving benefits in kind that have altered during the year.

HMRC’s acting director general for personal tax, Stephen Banyard, said the department was pleased to be able to begin processing PAYE reconciliations earlier than usual this year.

He also explained that once the Real Time Information system is introduced, the reconciliation process will be even easier because employers and pension providers will inform the Revenue about PAYE payments as they are made. This will reduce the need for remedial action later.

The Revenue expects the reconciliation process will be complete by October and says that customers do not need to contact it in connection with this matter.

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Image: 360/365 What time is it?…Early. by stuartpilbrow

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