Umbrella contractors 'could face further tax code issues'

PAYE umbrella company contractors have been warned of further problems with HM Revenue & Customs' (HMRC's) computer system.

The issues could lead to millions of people paying more tax than they should when the new tax year arrives in April.

As has previously been reported, the glitch involves HMRC's computer system generating multiple tax codes for the same person.

While the tax body has said it is working to rectify the problem before April, frontline HMRC staff have told BBC Radio 4's Money Box that they are sceptical it will be resolved in time.

"We're waiting to see if things are put right in April," one employee said on condition of anonymity. "But none of us believe that they will be, because we've heard it all before."

According to the Chartered Institute of Taxation, HMRC has issued almost 25 million tax coding notices during the current tax year, a figure which is almost double the volume of the previous year.

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