Tax advisers are warning taxpayers to be prepared for the latest tax calculations, which will be issued over the coming three months. Approximately 1.2 million calculations will be issued to taxpayers, advising them of underpayments of tax. The end of year reconciliation process began in July 2011, when any overpayments of tax were issued.
Following the receipt of a tax calculation in the months July to the end of September, repayments cheques were issued to taxpayers about two weeks after the date of the calculation. From 1st October 2011, taxpayers will start to receive calculations showing any tax owed to HM Revenue & Customs. Although the receipt of an unexpected tax bill may be alarming, HMRC are keen to reassure taxpayers that the amount will be collected through the next years tax code. If income is insufficient to do this, taxpayers may apply for a repayment schedule.
For the year 2010-11 the underpayment tolerance has been reduced from the previous £300 to just £50, resulting in more taxpayers receiving tax bills. During the three months of issuing tax repayments to taxpayers, approximately 3.5 million taxpayers received refunds averaging £340. The average amount of underpayments received by taxpayers over the next three months is thought to be around £550.
Taxpayers are being warned by tax experts to thoroughly check any tax calculations that they receive, especially following the problems with the years 2008-09 and 2009-10. Taxpayers should seek professional advice if they don’t think the calculation is correct.
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