David Prosser: The mystical meaning of Delphic tax codes
Wednesday 08 September 2010
Outlook One reason for HM Revenue & Customs' (HMRC) inability to get the tax affairs of millions of people right is their astonishing faith in people's ability to interpret the tax codes they are sent. The codes, typically three digits and a letter, make no sense whatsoever unless taxpayers take the trouble to look up their meaning on the HMRC website. Yet the taxman somehow seems to hope people will be able to work out whether they're paying the right amount of tax from peering at these cryptograms.
Speaking from recent personal experience, that hope is very much misguided. On the plus side, as customer experiences go, I can't fault about the usefulness of the HMRC helpline, where my adviser explained to me perfectly clearly why I have just been asked to pay several hundred pounds of additional income tax. My complaint concerns his suggestion that my last tax code alone should have alerted me to the fact that HMRC has merrily continued to give me tax relief on pension contributions that I actually stopped making some time ago.
As someone who regards himself as reasonably financially literate, I don't think it was unreasonable of me to fail to understand that a sequence of apparently random numbers and letters that HMRC sent to me a few months back with not a jot of advice on how to interpret them was actually a Delphic warning that my tax affairs had gone a little awry.
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