Check your tax codes for HMRC errors

Up to three million people who have more than one source of income potentially face backdated tax bills of £2,000 per year because of errors made by HM Revenue & Customs (HMRC).

Among those most likely to be affected are veterans who draw a military pension and have taken a civilian job after leaving the Armed Forces. Pensioners with two pensions and those who work part-time after retirement are also likely to be hit.

Problems typically arise because tax offices across Britain are failing to share information about taxpayers’ incomes. Often when people have two sources of income, whether that’s from pensions, PAYE employment or a mixture of the two, there are two tax codes issued by separate HMRC offices because each acts on the information given to them by an employer, pension provider or the taxpayer. The mistakes are discovered by HMRC years later, leading to unexpected tax demands.