Thousands of taxpayers in Northern Ireland may be forced to pay back hundreds of pounds due to errors in tax calculations.
Around 5.7 million people have paid the wrong amount of tax through the Pay As You Earn (PAYE) system because of an HM Revenue & Customs blunder.
Around 4.3 million of these have paid too much and are due a refund, but 1.4 million people have underpaid and will have to hand over an average of £1,428 each.
A total of £2bn has been underpaid through the PAYE system over the past two years, while £1.8bn has been overpaid.
A high number of discrepancies have been thrown up this year due to the use of a new IT system, which holds all the information on an employee in one place, rather than having it spread over several different systems.
However, the new system should mean that more people pay the right amount of tax through the PAYE system than previously.
In a statement HM Revenue & Customs said: "Over and underpayments have long been a feature of the PAYE system and always will be, because people's circumstances change during a tax year and we often do not learn of changes until after the year end.
"However our old computer system was based on a model of employment which no longer reflects the frequency of such changes in the contemporary job market. We don't regard this as acceptable so last year we introduced a new computer system".
"This year and going forward the new IT system will mean more people paying exactly the right tax at the time then ever before."
HMRC has sent out the first 45,000 letters to people who are affected, around 30,000 of whom are due a rebate, while 15,000 have underpaid tax.
The remainder of people affected will be contacted between now and Christmas.
Experts said people hit with an unexpected tax demand may be able to refuse to pay up as HMRC could have exceeded its own time limits in which to ask for the money.
Under tax rules HMRC must issue demands for underpaid tax within 12 months of the end of the tax year in which it became aware that people had underpaid.
But if people provided HMRC with all the information they needed to get their tax code right, it should have used this information within 12 months of the end of the tax year in which it was received to claw back the extra money.
You might have overpaid tax if:
- HMRC made a mistake with your tax;
- Your employer used the wrong tax code;
- You started a new job and had an emergency tax code for a while;
- You only worked for part of the year;
- You had more than one job at the same time;
- You didn't tell HMRC right away about changes to benefits you got through your work;
- Your circumstances changed - perhaps you were made redundant or became self employed and therefore your income reduced;
- Other income like investments or rental income reduced but you didn't tell HMRC
You will only receive a letter if you have paid too much or too little tax for the tax years 2008-09 and 2009-10. The first batch of letters should start to be delivered this week.
© UTV News