New UK Tax System Causing Anger and Confusion

Systems Works As Designed But Not As It Likely Should

1 min read

New UK Tax System Causing Anger and Confusion

News reports from the UK are indicating problems with the new Her Majesty's Revenue and Customs (HMRC) computer systems.

According to this story in the Yorkshire Post, 186,115 veterans and war widows received letters from HMRC saying that they will be now taxed on their war pensions.

The letters were in error, but to avoid being hit with a 20 percent tax, each veteran and war widow is going to have to contact HMRC to correct the error.  The HMRC is not going to fix it otherwise, it says.

In a similar vein, a story in says that an unknown number of UK taxpayers will likely be paying too much tax because of another issue with the HMRC computers. For unexplained reasons, the story says that "... the HMRC database appears to have lost information it holds about people leaving jobs and as a result is combining taxpayers’ current employment records with old data. It is concluding that they have two jobs, thus putting them in a higher tax bracket ..."

Again, it will be up to individual UK taxpayers to inform the HMRC that they have a problem and then hope that the HMRC eventually corrects it.

Even that may be hard to do. A story in says that some taxpayers have received up to three different tax codes from the HMRC, all of which are wrong.

In the Yorkshire Post story, an HMRC spokesperson said that the new HMRC computer process "would significantly reduce both over- and underpayments" - by whom, he didn't say - while in the story, an HMRC spokesperson "insisted the IT behind the new system is working as it should."

That's a scary thought.

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