As if HMRC weren’t already struggling enough with recent tax blunders and an ever complex tax system they have now decided to look into cases dating back six years. HMRC have a current backlog of 17.9 million cases. Almost 2 million of them date back to 2004 and they people involved could face new tax demands.
How exactly have HMRC gotten into such trouble recently? It is widely agreed that the PAYE system is outdated and simply cannot cope with the complexities of modern work patterns. With the current climate how it is people will struggle to find work anywhere. For a subcontractor for example this could mean a few weeks direct work with a company on the books followed by 2 weeks work self employed. These ever changing and often uneven work patterns could be held accountable for possible discrepancies in over payment or under payment of tax.
HMRC are now utilising a new computer system which they hope will tackle these so called ‘open-cases’. However, about 5 million of these old cases have been abandoned as HMRC can no longer trace the individuals.
