Thousand receive HMRC tax letters

A small proportion of the nearly six million people who paid too much or too little income tax have found out whether they are due a rebate or have to make more payments.

The first 45,000 people affected by an HM Revenue and Customs blunder have received letters informing them if they owe money or are due a rebate.

Around 5.7 million people have paid the wrong amount of tax through the Pay As You Earn (PAYE) system. Around 4.3 million of these have paid too much and are due a refund, but 1.4 million have underpaid and will have to hand over an average of £1,428 each.

Experts said people hit with an unexpected tax demand may be able to refuse to pay up as HMRC could have exceeded its own time limits in which to ask for the money.

Under tax rules HMRC must issue demands for underpaid tax within 12 months of the end of the tax year in which it became aware that people had underpaid.

But if people provided HMRC with all the information they needed to get their tax code right, it should have used this information within 12 months of the end of the tax year in which it was received to claw back the extra money.

The remainder of people affected will be contacted between now and Christmas.