14th February 2012
HMRC is urging employers to double check the employee data submitted on tax returns, after research revealed that many are completed with dummy, incomplete and inaccurate information.
Employer returns contain the personal details, such as names, dates of birth, national insurance numbers and addresses, of millions of employees listed on payroll, however, thousands of these are being submitted inaccurately.
A recent study of employer returns found that 824 employees had the surname 'Unknown', 500 had the name 'An. Other', whilst a further 128 staff were entered as Mr, Ms, or Mrs Dummy - most likely the result of test information being included amongst returns.
In another instance, 40 employees were - according to their date of birth - more than 200 years old.
The most common errors however were the swapping of employees' forenames and surnames, and the including of initials instead of full forenames, both of which can make it difficult for HMRC to identify individuals and work out the correct tax and NICs.
HMRC has now launched a new online video as a result of the research, detailing how inaccurate employer returns can waste the time and money of employers, employees, and HMRC alike. Employees in particular may end up paying the wrong amount of tax, or loose entitlement to state benefits such as their pension as a result.
Jim Harra, HMRC's director of customer operations, said: "It's really important that employers get their employees' information right, so that HMRC can match it to the right tax records. Otherwise, it can lead to more contact from staff, trying to sort out their tax, and from HMRC, trying to sort out the data issues."
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