As Benjamin Franklin (the founding father of the tax refund – I joke) once claimed…
there are two certainties in life: death and taxes. Whilst most of us accept we have to ‘pay our way’ in order to fund the UK’s public services, it’s also fair to say that nobody wants to pay more tax than is absolutely necessary.
So a report out this week from the National Audit Office (NAO) that claims up to three million people may have paid the wrong amount over an 18 month period from 2014 to 2016 – all due to catastrophic failings within HMRC’s customer services department, and all due a tax refund – has many members of the public grinding their teeth in frustration.
The statistics make for pretty grim reading: callers during this time were often left waiting over an hour to speak to an advisor and an estimated £97million of taxpayers’ money was wasted on the combined cost of calling up and as the economic cost of time spent waiting to be answered.
In a nation of time-poor consumers, where the average worker toils for over 43 hours per week, you’ll be hard pushed to find anyone who will happily take their place in a call-waiting queue for 60 minutes or more.
How To get Your Tax Code Fixed & Your Tax refund
But if you’re saddled with the wrong tax code, where else can you go to rectify the issue? Answer – nowhere but HMRC.
In HMRC’s defence, it has been quick to accept recent criticisms, adding that any issues have been fully rectified. In fact Ruth Owen, HMRC’s director general for customer services added that the authority is now offering “its best service levels in years” and over the past six months has “consistently answered calls in an average of six minutes”.
But perhaps there’s a greater issue afoot, of which the long call times are just merely a symptom.
Simply – the average Briton cannot be sure their own tax code is correct, as they rely on others to deal with this aspect of their personal finance (namely the finance department at their place of work). We popped out to our local high street to quiz 30 members of the public asking them the simple question “Do you know if your current tax code is correct?” Only two knew the answer – that’s less than seven per cent. What’s more interesting is that comments ranged from “Isn’t there just one for everyone?” to “My finance team deals with that sort of thing.”
Ok, 30 people certainly isn’t a representative sample of the UK population, but it does demonstrate a real lack of understanding of the tax system and shades of a laissez-faire attitude that assumes your tax code, and its correctness, is somebody else’s problem.
In reality nothing could be further from the truth – your employer is obliged to use the tax code that they’re given by HMRC. If it’s wrong, they can’t do anything about it. It’s the responsibility of the individual (that’s you!) to check the code and make sure HMRC has issued the correct one.
At the same time, if it is wrong, it’s your responsibility to get it corrected as soon as possible.
And with our figures showing that 37 per cent of cases handled by The Tax Refund Company have overpaid due to code inaccuracies there has never been a better time to check you’re being taxed correctly.
For a tongue in cheek overview of the situation, take a look at this Telegraph cartoon.