More than two million older people have paid more tax on their savings income than they need to, the Public Accounts Committee found. HM Revenue and Customs does not know how many people miss out on age-related allowances they are entitled to. The tax authority said it was considering the report in detail.
Discrepancies between the HMRC's records and those of employers and pension providers mean that 1.5 million older people overpaid £250m in tax - but these people were less likely to contact the tax authority for help than younger taxpayers. Problems have been blamed on the HMRC's systems not being able to cope with various sources of income for the elderly. Older people tend to receive multiple tax code notices because they have more than one source of income.
Questions have been raised over the accuracy of coding notices this year owing to a new computer system, which is bringing people's tax and national insurance records together for the first time.
