Faulty software tells Brits they’re owed tax refunds

HM Revenue & Customs was at the centre of fresh controversy after it emerged that its computer system was telling people they were owed five-figure tax refunds.

The error was uncovered by chartered accountants Blick Rothenberg which noticed a note on the self-assessment account of one of its clients stating that a refund was due. The group then checked the accounts of all of its clients and found that in every case HMRC was saying it owed them sums of between a few pounds and £24,000.

Frank Nash, tax partner at Blick Rothenberg, said: “HMRC’s online system for self-assessment was down a couple of days ago. It was resurrected and when we went on to it to look at our clients’ statements of account to tell them what their current tax situation was, we noticed that everybody was due a repayment.”

He said that it was not an isolated incident, as the group had spoken to other tax firms, and all of their clients were told that they were due a refund too. He added that the firm knew it was an error as they knew what their clients were due to pay, and they were not owed refunds…

He also said the error might mean that people who were genuinely owed money by HMRC could have to wait for longer before they received their refund. The situation is also likely to cause confusion among self-assessment taxpayers who do not have an accountant…

The problem came to light as it was disclosed that HMRC more than tripled the pay of a key architect of its controversial new PAYE system to stop him walking out at a crucial moment.

A package worth £600,000 a year pro rata was agreed to keep Deepak Singh as acting chief information officer (CIO) for an extra three months after he failed to land the post permanently.

To further sweeten the deal keeping him on for the three months, the government paid £19,200 to help him find a new job after the temporary cover had finished.