Fleet News

Error gives a million the wrong tax codes

FLEETS are facing unexpected tax bills after the Inland Revenue issued hundreds of thousands of drivers with incorrect tax codes.

Up to one million company car drivers may have been issued with wrong codes after the Inland Revenue's computer system failed to produce accurate figures, the third year there have been problems.

Miscalculations mean drivers could underpay tax and will be hit with a demand to settle up the underpaid tax at the end of the tax year.

A spokesman for the Inland Revenue confirmed there had been a computer error, although he declined to say how many drivers had been affected. He said the Inland Revenue was now on top of the problem.

'Fleets do not need to do anything about this. The problem has now been sorted and new, correct codes are being issued,' he said.

The Inland Revenue has seven weeks to resend the correct codes.

These codes will then have to be re-inputted by individual companies and, as tax payments on company cars are deducted from an employee's net salary, it will be the employers who will be deducting the incorrect amount.

Financial adviser Grant Thornton predicted a tax blunder last year following incorrect codes in 2002 and warned company drivers and fleet managers to check their codes urgently.

A spokesman said: 'The message is simple. It makes sense to double-check the code you have been given, particularly if the benefit has been estimated.'

Last year's blunder saw the Inland Revenue miscalculating tax codes, which meant small vehicles producing low levels of CO2 were placed in a high tax bracket reserved for vehicles with the highest emissions.

In 2002, when the new carbon dioxide-based company car tax system was launched, 17.5% of company car coding notices issued by the Inland Revenue were wrong.

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    • Patrick Birch - 25/08/2013 22:39

      what was the date of this report as when I contacted the tax office on this issue they blamed my company for the £1800 I owe them which I believe is incorrect as I personally phoned the tax office when I changed my company Mondeo for a PRIUS to save on my company car tax which I felt was getting ridiculous for a work tool and I also have the P11D from the company

      • FN Webteam - 25/08/2013 22:50

        @Patrick Birch - this article is from 2004, see date on article.

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