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Millions of people due for tax rebate

 

Millions of people in the UK are due to receive a tax rebate following a problem with HM Revenue and Customs’ (HMRC) Pay as You Earn (PAYE) computer system. 

 

It is thought that 4.3 million individuals paid too much tax between 2008 and April this year, with those affected expected to receive an average rebate of £418 each.

 

The first 45,000 letters informing people are expected to arrive on Tuesday with the rest due before Christmas.

 

HMRC has identified a further 5.8 million people who may have overpaid income tax before March 2008. However, experts warn that it could take up to four years for individuals to be reimbursed.

 

In addition, 1.4 million people are believed to have underpaid around £2 billion via the PAYE system. Each person will be required to pay back an average of £1,500.

 

An HMRC spokesman told the BBC: ‘The overwhelming majority of PAYE cases - over 40 million - are right, so most people have paid the right amount of tax. But for a variety of reasons in some cases there will be a discrepancy.

‘The Government accepts that the way we go about deducting tax at source needs to be much more accurate and the introduction of the NPS [computer system] paves the way for a real time system which in turn boosts accuracy.’

Meanwhile, Emma Boon from campaign group the Taxpayers' Alliance, said: ‘Some [people] won't be finding out about it for a few weeks or maybe even a few months, so it could be towards Christmas which really isn't what you want to hear’.