HMRC demands £7,662 tax on £79 earnings and finally issues refund
- HMRC mistakenly taxed an individual for a job they haven't held since 2020.
- After significant deductions, HMRC issued a £1,722.20 tax bill on minimal earnings.
- HMRC has now apologized and is processing a refund after correcting the individual's records.
In Edinburgh, Scotland, HMRC has been taxing an individual identified as MH for a job that he has not held for nearly three years. During this period, MH was placed on the payroll of a charity named Move On with expectations of future work. However, the outbreak of the pandemic halted any such prospects, and MH ultimately did not return to the charity after only working a half day. In early 2022, Move On transferred to a new payroll system, which resulted in HMRC deducting nearly £6,000 in taxes from MH's subsequent employment despite his unemployment status for much of the tax year. Consequently, HMRC issued a tax bill for £1,722.20 on what they claimed was income from Move On, leading to total tax demands amounting to £7,662.85 for a meager income of £79.10.