Author : Great Britain: National Audit Office
Publisher : The Stationery Office
Page : 52 pages
File Size : 23,60 MB
Release : 2007-07-06
Category : Business & Economics
ISBN : 0102946744
Book Description
This NAO report, examines the Department of HM Revenue and Customs accuracy in processing Self Assessment Tax forms and the PAYE scheme for Income Tax. In the 2006-07, the Department collected £149 billion in Income Tax, dealing with the tax affairs of some 36 million taxpayers. In total, £125 billion was collected via employers through the PAYE scheme and £24 billion from self employed people, and others with additional income through the Tax Self Assessment. The Department needs to spend about £1.7 billion per year in administering Income Tax, with the processing taking place across the Department's 300 offices. This report draws some of the following conclusions: that the correct tax assessment occurs in 95.4% of cases; there is a 96.5% accuracy in processing Self Assessment, whilst PAYE cases were 95.1% accurate (but 25% of PAYE cases are more complex, with more processing needed, and so a greater error rate, at 82.1%, is found in these instances). The Department itself estimates inaccurate processing has led to 3.6 million errors in Self Assessment and 2.8 million errors on PAYE in 2006-07. Taking all the various processing errors together, just over 1 million taxpayers in this period had received £125 million in underpayments of tax and £157 million in overpayments. The most frequent type of error is in the Department's calculation of tax codes, which are used by employers to calculate deductions of income tax from employees' pay, with 63% of the PAYE error rate relating to tax codes. Among the report's recommendations are: that HM Customs & Revenue should continue with the quality monitoring, identifying specific types of error; they should facilitate the sharing of good practice across the tax offices; further develop an early warning system, through the analysis of trends in monthly data; separate out more complex cases to process by specialised teams and develop a customer-focused approach by tracking the effect of error rates on the different taxpayer groups.