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The Chartered Institute of Taxation are concerned that a large proportion of the 25 million tax code notices currently being issued by HMRC are wrong. They are requesting that HMRC launch a publicity campaign to make people aware of the potential errors.

In a press release, President of CIOT Andrew Hubbard stated: “Most people on PAYE are used to assuming that what the taxman sends them is correct. Many file away coding notices without even bothering to check them. But this year, many of them are being given wrong information too, and they could get a nasty shock when they open their April pay packet and see it is as much as a hundred pounds lighter than they are expecting.”

He continued: “The government should launch an urgent publicity campaign to highlight what has happened and tell people what they can do about it. They also need to add a specific warning about it to the majority of P2 notices – the letters containing tax code information – which have still to go out.”

Mr Hubbard concluded: “This comes at the worst possible time of the year for HMRC, whose enquiry systems are already stretched to capacity by people seeking advice ahead of the self-assessment deadline at the end of January. The new PAYE system is potentially very good and this is really just a teething problem – but a serious one that HMRC needs to warn taxpayers and their advisers about and help them resolve.”

The IT Job Board has revealed that there is a positive outlook in 2010 for contractors with IT skills. Reporting that there is likely to be a rise in demand for business analysts, web development professionals and project managers, the study concluded that 34per cent of professionals within the industry expected that 2010 was see a surge in demand for managers, closely followed by analyst recruitment.

With companies embarking on large expansion plans and new IT projects in 2010, sales director at the IT Job Board Peter Healey expressed that he expected “a great deal more” management roles being recruited for. Furthering his point, Mr Healey said that along with project managers, new schemes would also ensure rising posts for those in development and testing niches. Particularly badly hit during the recession, these positions are likely to flood back into the 2010 job market, a positive sign for contractors working through PAYE umbrella companies.

He added “as we continue to get to grips with social and business networking, Web 2.0 skills will be critical, for example .net and Java,” explaining that now was the ideal opportunity for individuals to increase their skill set by developing .net, Java, web development and SAP competences.

Also spurring the movement for the uptake of freelancers on a short-term basis was last week’s claim by the PCG. Explaining the benefits of hiring short term contractors, PCG managing director John Brazier said that both cost and risk to companies could be minimised by outsourcing job positions for contract work.

Many tax payers using HMRC’s online self-assessment filing facility may have fallen victim to a computer glitch.  The system had an option available for taxpayers that allowed them to choose to pay their taxes by way of a special PAYE tax code. 

It is thought that hundreds of people decided to select this option.  The problem for HMRC seems to be that this option was supposed to only be available until the end of December 2008.  Unfortunately, HMRC can’t seem to figure out how to make the option unavailable so anyone that visits the site will see it as a valid option to choose.

Because the option appears to be valid, people may select the tax payment option without ever knowing that there is a problem.  No taxes would be removed through PAYE and a person could be liable for interest on the amount of taxes that were due.

 HMRC has said that anyone that ends up in this type of situation will not be penalized for their mistake.  According to HMRC “If customers use this option believing that having their underpayment coded out is still a valid option, we will show any underpayment in their PAYE tax code if they contact us and ask us to do so.”

It was also noted by HMRC that they will be contacting people who selected this option in early February.  Many people have already contacted HMRC in regard to the issue and have had the problem taken care of.

Source: www.bbc.co.uk