John Messore, partner at professional services firm Innovation LLP, said most incorrect tax codes relating to company cars resulted in an employee under-payment to HMRC, sometimes of up to £1,200.

“It is vital every employee checks their own tax code and if they are not happy with it they should contact HMRC,” he said. “The error may ‘benefit’ the taxpayer, but will eventually be corrected and that could mean quite a lot of money owed.”

Part of the problem is a lack of resource at HMRC, Messore added.

“The forms are complicated to fill in and there are many people in the loop – employees, HR, fleet manager, payroll – so it could be months before the correct information is passed to HMRC. It then takes time for that information to be processed and the correct coding notice issued because resources have been cut.”

Even tax professionals have been affected. Earlier this year, David Rawlings, a director of business car consultants BCF Wessex, received an incorrect tax code that was only corrected at the third time of asking.

“It is quite appalling and careless, but due to a lack of resources and inadequate staff training,” he said.

“It seems to me that if your circumstances change during the year – for example you change your company car or change jobs – then there is a possibility of an incorrect tax code being issued.”

HMRC puts the blame on employer or staff error. A spokesman said incorrect codes were caused by the latest data not being available from employers or inaccurate information supplied by the company or its employees.

Early last year, some ACFO members highlighted concerns that local HMRC offices were ‘changing’ company car P11D values because they believed those quoted were incorrect.

ACFO membership secretary Stewart Whyte said: “The data was investigated but no case was proven and we heard nothing further from members.”

Have your drivers been issued with an incorrect tax code? Demand action from HMRC by signing our petition at epetitions.direct.gov.uk.

Tax codes: the errors

Example of errors in relation to company cars include:

• The wrong P11D value being used for a company car triggering a tax bill £1,000 higher than expected
• Private fuel benefit removed by the employer from employees who have then been ‘double taxed’ on their company car
• Private fuel benefit removed by the employer from employees but the tax burden has not been lifted
• An LCV taxed as if it was a company car
• The wrong benefit-in-kind tax figure calculated even though the right company car P11D value was used