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Taxpayers enjoy early payback

The taxman is to hand back overpaid tax earlier than ever before this year with 3.5m taxpayers set to receive sooner than expected windfalls of an average £379.

But the news won’t be so welcome for the 1.6m people who still have tax due for the 2011/12 tax year and will be asked to make up the average £537 shortfall.

RoseffTax specialist Tom Roseff, of Harrogate accountancy firm Saffery Champness, said the refunds were expected to be paid out two months sooner than last year because work to reconcile Pay As You Earn had started early.

Tax specialist Tom Roseff said:

Changes in circumstances during the tax year mean around 15 per cent of taxpayers end up paying the wrong amount of tax and with so much volatility in the employment market more people are likely to be affected in the year ahead.

Job changes, periods of unemployment or changes to benefits in kind by employers are just some of the factors that could mean people have had the wrong amounts of tax taken off at source.

But he said the need for corrective payments or demands would diminish with the introduction of new technology.

HMRC is introducing Real Time Information systems which make it easier for employers and pension providers to update changes to factors influencing PAYE payments as they happen rather than at the end of the year and this means fewer people will be affected by overpayments or shortfalls in the future.

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