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Tax errors

A new computer system used by HM Revenue and Customs (HMRC) has uncovered errors in the Pay as you earn (PAYE) tax system which means that millions of people are to be told that they have been paying the wrong amount of tax in the past two years. Their tax codes will be altered next year to retrieve the money - which on average should be £1,428. People who moved jobs or accepted company cars or cash benefits from their employer were the most likely to be affected.

In a separate development, another 10 million+ people may be entitled to a tax rebate because of errors in the tax code system. HMRC hope to repay at least some of the money owed over the next four years - which is expected to be an average of £418.

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