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11 September 2010updated 27 Sep 2015 2:14am

I don’t need to apologise for tax errors, says HMRC boss

Although 1.4 million people face four-figure repayments, UK's top tax man says there was no blunder.

By Samira Shackle

It’s been a bit of a week for non-apologies. Hot on the heels of Jonathan “I am sorry if some people judge that I made a mistake” Djanogly, the UK’s top tax official has refused to apologise after taking the wrong amount of tax from nearly six million people.

It is thought that 2.3 million people have underpaid income tax during the past two tax years due to errors in their Pay As You Earn (PAYE) tax code. The shortfall is around £2bn. About 1.4 million people will be expected to pay back this amount (around 900,000 are below the repayment threshold), owing an average of £1,428.

But is HMRC repentant? Not exactly. Dave Hartnett, Permanent Secretary at her Majesty’s Revenue and Customs, told BBC Radio 4’s Money Box programme:

I’m not sure I see a need to apologise.

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I’ve read the papers, listened to the media and heard stories of HMRC blunder and IT failure — neither of those are true.

Claiming that the letters that will go out to 5.7 million people were simply part of a normal process of matching the tax deducted with the taxpayer’s circumstances, he added: “We didn’t get it wrong. This needs to be reconciled.”

This total denial is somewhat strange, given that HMRC admitted a few months ago that the move to a new IT system in June 2009 has “brought to light discrepancies… and this is resulting in a number of incorrect [PAYE coding] notices being issued”.

The new system holds all the information on an employee in one place (rather than spread over several systems, as before), making it easier to tell if people have paid the wrong amount of tax. But, as the Low Incomes Tax Reform Group pointed out, this does not mean that HMRC is not responsible for the incorrect payments:

The underpayment may have arisen because HMRC have failed to make timely use of information about you which they have had in their possession.

People who have underpaid are being urged to check and challenge their repayments.

 

UPDATE 9pm: Following wide criticism from MPs, pressure groups, and taxpayers, Hartnett has issued the following statement:

I apologise if my remarks came across as insensitive.

I am working flat out with my colleagues to ensure everyone’s tax is correct and the new computer system will help us do this.

It was this new system that revealed the extent and size of reconciliations required and will help us be more accurate in future but we do not underestimate the distress caused to taxpayers and once again I apologise.