HM Revenue & Customs (HMRC) is currently addressing a problem where some taxpayers received duplicate self-assessment tax rebates due to a glitch in communication between its systems. Specifically, there’s an issue connecting HMRC’s Pay As You Earn (PAYE) system and its Computer Environment for Self Assessment (CESA). They’re looking into how this overlap caused some refunds to go out twice. While HMRC admits it’s a rare occurrence, a spokesperson emphasized that it impacts only a small number of people under very particular circumstances.
Capgemini manages the PAYE system, and Fujitsu handles CESA, but HMRC clarified that the root cause stems from how they designed the entire system and not from the individual systems themselves.
Tim McCormack, a well-known advocate for subpostmasters affected by the Horizon IT scandal, alerted HMRC to this issue. He wrote to Jim Harra, the boss of the department, on January 22, highlighting concerns over the system’s reliability. McCormack’s earlier warnings about the Horizon system had gone unheeded in the past, as subpostmasters faced unexplained discrepancies in their accounts.
In his email, McCormack pointed out flaws in HMRC’s system, claiming that similar problems had persisted for years without proper resolution. He stressed that unlike the Post Office’s situation, which involved financial gain for the organization, this issue is actually costing HMRC money.
On February 10, McCormack received a prompt response from HMRC inviting him to an online meeting four days later, attended by five representatives from the department, indicating the seriousness with which they were treating his concerns.
When Computer Weekly inquired about McCormack’s case, HMRC provided an explanation. They noted that McCormack’s self-assessment record had gone dormant after he filed his tax return for 2022-23. They sent him an exit letter, stating he wouldn’t need to file further returns unless his circumstances changed. However, when he submitted a voluntary tax return for 2023-24 the following April, it included his bank details. This led to HMRC processing the refund without the PAYE system recognizing it, resulting in duplicate payments when the systems reconciled.
HMRC stated that they recognize this unique scenario where errors can happen and are now investigating the matter further. They reassured that it affects a very limited number of self-assessment customers, some of whom might have filed paper returns, which would help catch quite a few discrepancies.
Furthermore, HMRC revealed it has two procedures in place to flag these mistakes and is working to prevent situations where undetected cases lead to duplicate payments. They expressed gratitude to McCormack for his assistance in addressing the problem.
This isn’t the first report of such a glitch. In an HMRC community forum, another taxpayer shared a similar experience, detailing how they received both a bank transfer and a check for their tax refund, without guidance on how to return the excess.