Pensioners could be owed tax refunds after an HMRC error affecting the State Pension. The mistake, which dates back to 2010, involved incorrect figures in the PAYE system, leading to higher tax margins when calculating bills.
HMRC Apologises and Issues Update
HM Revenue and Customs announced the error earlier this year and has since issued an update. Permanent Secretary John-Paul Marks wrote to the Chair of the Public Accounts Committee, apologising: "I apologise for this error and especially to those pensioners who have been affected. I know that any shortfall matters, particularly to customers on fixed or limited incomes." He added: "I would like to reassure the Committee that HMRC is taking this issue very seriously and we are working at pace to put in place a solution."
Scope of the Error
The error is believed to have affected PAYE end-of-year reconciliations, and may also extend to Self Assessment tax returns and Simple Assessment calculations. As a result, hundreds of thousands of pensioners are thought to have paid too much tax since 2010. HMRC estimates that most overpayments are small—only a few pounds a year—but some pensioners may be entitled to larger refunds depending on individual circumstances.
Letters Sent to Pensioners
HMRC sent letters on June 1 to around four million people, with mailouts continuing until the end of August. Officials stated: "You must respond to the letter so we can make any repayments owed to you as soon as possible." According to the tax authority, the average unclaimed repayment stands at £473. Those affected do not currently need to contact HMRC, but concerned individuals can check their latest tax calculation and inquire about potentially incorrect figures.
