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Six million hit by tax mistakes
| Updated at: 1058 PST, Sunday, September 05, 2010|
LONDON: Nearly six million people in the country will be told that they have paid the wrong amount of tax, with 1.4 million facing demands to pay more, the tax office said on Satuday.
Around 4.3 million people will be informed they have paid too much, amounting to £1.8 billion.
The tax office said it will begin sending notices to people in the coming days, informing them of the correct amount.
"The notices will tell them either that they are due a refund or that we will collect underpaid tax through their code for 2011-12," the HM Revenue & Customs (HMRC) said in a statement.
An amount of £2 billion has been underpaid through the Pay as You Earn (PAYE) system over the past two years -- an average of £1,500 per person for 1.4 million people.
Those who have overpaid could expect to get an average of £418.
HMRC said the differences arose because of a change in circumstances, such as a change of job.
People may have overpaid if their employer used the wrong tax code, or had more than one job in the tax year, the HMRC said.
"The vast majority of the 40 million people who pay through PAYE deductions are correctly taxed but because circumstances change during the year there will always be a minority who have paid either too much or too little," HMRC said.
The first 45,000 letters are expected to reach households on Tuesday.
Millions more will be sent over the next few months.
Campaigners said the magnitude of the mistake was unacceptable.
"It is completely unacceptable that a mistake of this magnitude could have happened," said Emma Boon, manager of the TaxPayers' Alliance campaign.
"We've seen errors resulting in over or underpayments in the past, but the scale of this is shocking," Boon said.
Boon has called for taxation to be simplified.