2m facing tax demand

TWO million taxpayers will be billed for £800m after paying too little tax during the last financial year, figures reveal.

A further 4.7m paid too much tax and are owed a refund.

For those who did not pay enough tax, officials said the average shortfall is around £400. This will be collected over the course of the next financial year starting in April through an adjustment to their tax code.

A £400 underpayment would mean an extra tax payment at £33 per month.

HMRC has already written to most who are owed a refund and either sent them a cheque or put the money into their bank account. The average rebate was also around £400.

HMRC recorded 4.32m overpayments and 1.87m underpayments in 2015 to 2016.

The taxman said it is not always informed promptly of changes in people’s circumstances – such as a rise in income – which can mean that the correct amount of tax does not get collected.