Tax Repayments made but not due

Tax Repayments made but not due

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I'd love to know the amount that is churned out by HMRC's computer in erroneous in tax repayments. It must add up to a staggering amount.

A woman came to see me yesterday who had been getting a Repayment every year for the last 5 years of between £200 - £400. She has a small occupational pension and NIRP which added together come to less than her personal allowance. However, also included in the calculation is £1,968 bank interest (and the basic rate tax supposedly paid on it). The figure of £1,968 appears in all 5 years tax calculations (i.e. it's just been carried forward without question). She's not in SA and never been asked for up to date figures.

In actual fact the interest received has declined over the years and most of it has been paid gross (under R85 procedures). So she has probably received £1,500 too much over the years. She is happy to pay this back but I'm sure there are plenty of similar cases where HMRC's computer churns out repayments that the recipients either don't know are wrong or turn a blind eye to. I'm sure the country's deficit could be a lot lower if some of these issues were tackled.

Sorry, more a rant than a question, but would like to know of other similar examples.

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