HMRC pledges to cut tax coding issues

HM Revenue & Customs (HMRC) has pledged to PAYE umbrella company contractors that the number of tax coding issues will be reduced in the future.

In an update informing affected parties of its ongoing work to rectify the problem and investigate why it occurred, the organisation said that most of the cases involved a variance of information between itself and employers.

To make sure that the issues do not arise again, HMRC said it will work more closely with some employers and pension providers.

When the problem first arose, the Chartered Institute of Taxation pointed out that the Revenue had issued almost twice as many coding notices in 2009-10 as it had in the previous tax year.

"The numbers of inaccurate codes should be minimised going forward," HMRC said in a statement.

It went on to add that it will provide additional details of "areas we have identified which could have caused an incorrect tax code to be sent" in the near future.

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