HMRC reports that over 5.5 million have paid the wrong amount of tax
HMRC has revealed that around 3.5 million people have paid too much tax in 2012-13 and are owed refunds averaging between £350 and £500.
In contrast, there is also around 2 million others who owe an average of between £400 and £500 after making underpayments through PAYE.
The end of year reconciliation process which checks PAYE deductions made by employers matches that shown on their records, began last week and will run until end of the year.
An HMRC spokesman said “Around 85% of pay as you earn taxpayers pay the right tax throughout the year … This is the normal process that the PAYE system has used for 70 years,”
They argue that the vast majority of the 40 million PAYE workers are taxed correctly, and the discrepancies arise due to changing circumstances for example, moving jobs or changes in received benefits.
However, the scale of the numbers of people affected, estimated to be in the regions of 5.5 million, have surprised many.
Those who have paid too much tax will receive a a cheque and these should start arriving early next month.
The vast majority of those who have underpaid tax will probably not get a bill; the extra tax will be collected through a change of tax via deductions from their salary during the 2014-15 tax year. They will receive a letter giving more information.
HMRC has said it is sympathetic to cases of genuine payment difficulty, and those who cannot afford to pay should get in touch. These people may be able to pay what they owe over following two or three years.