Accountants issue warning over HMRC tax calculations

Personal tax calculations from HMRC should be checked carefully for errors – such as claiming tax twice – a leading independent accountancy firm is warning.

Lee Watson, senior tax manager at Clive Owen LLP, which has offices in the North East and Yorkshire, said it was vital to check any calculations received, as some could be inaccurate.

Lee said: “There are examples where HMRC may include investment income, such as bank interest and dividends, which are estimates used in previous years when investment returns were much greater than they are now.

“It’s also possible that HMRC or your employer have made errors that have led to tax underpayments and in some circumstances those underpayments made be reduced or written off.”

Lee said that in addition, the calculations may not give relief to higher rate taxpayers for charitable donations as HMRC are unlikely to be aware of the amount paid.

“Also, there may be some extra tax relief for higher rate taxpayers in respect of pension contributions, particularly those made under the new Auto Enrolment scheme,” he said.

“In some instances, HMRC may be inadvertently collecting the tax twice as the individual taxpayer may be required to complete a self assessment tax return in which any underpayments of tax will be collected too.”

Lee added: “Individuals may not be claiming tax relief for job related expenses such as professional subscriptions, costs of cleaning uniforms or even business mileage if their employer does not reimburse them at HMRC approved mileage rates.

“Unfortunately it’s not beyond the realms to suggest that HMRC have made an error and even if the underpayment is correct, it’s important to review how HMRC is collecting the underpayment as we have come across instances where that may be incorrect in itself.”

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