A taxpayer has received a tax code of K33,200. Does this set a new UK record?
The seriously negative tax code was generated in February, the fruit of data migration problems caused during the upgrade of HMRC's notoriously unreliable PAYE computer. It was brought to the attention of the Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) by a member.
It seems that the coding notice created the K code based on an annual state pension of £350,000!
Few people have escaped the miscoding fiasco and members of the ATT's tax technical committee have reported that HMRC is not actively following up the errors. It seems that the policy is to "wait and see", so it expects taxpayers to phone in and then the changes will be corrected. This strategy is likely to be a winner for HMRC's cashflow: it is difficult to get through on the PAYE helpline, so there may be some large PAYE overpayments made this month if codes are not amended by the time that April's payrolls are run.
Meanwhile, HMRC has launched an "urgent enquiry" to uncover the root cause of the problem which is bound to be flagged up by a the National Audit Office when it reviews the departmental accounts. The Government's Treasury Select Committee will no doubt be calling HMRC chiefs in to explain themselves if that happens.