HMRC Admits 2010 Tax Error Affecting Thousands of Pensioners

HM Revenue and Customs (HMRC) is working to permanently resolve a tax calculation error that potentially impacted hundreds of thousands of pensioners. The mistake originated from changes made to the PAYE system in 2010 and affected Simple Assessment calculations, Self Assessment tax returns, and PAYE end-of-year reconciliations.

Permanent Secretary John-Paul Marks apologized for the error in a letter to the Chair of the Public Accounts Committee. He stated that the agency is working to implement a permanent solution for future calculations and correct records for the 2025/26 tax year.

HMRC estimates that while most overpayments amount to only a few pounds per year, some individuals may be entitled to larger refunds. The agency has not yet established a simple method for pensioners to check if they were affected and will release further information once it identifies all impacted taxpayers and determines the refund process.