A HM Revenue and Customs (HMRC) error that sparked a £1.5k overpayment for a member of the public has seen a call for others to check their tax code. HMRC told a worker they had £3,847 in untaxed savings interest when it was actually £94. This led to a tax overpayment of £1,476 for 2025-26 and a £200 monthly cut in pay.
The issue may have affected others who find themselves saving into an ISA account. The £1.5k overpayment flagged by The Telegraph may have affected more than one person in the country. HMRC tells UK banks and building societies to send in yearly returns listing interest paid or credited to reportable customers. HMRC uses these returns to pre-fill tax accounts, send PAYE coding notices, and check self-assessment tax returns.
Finanical services company Zopa warned that “hundreds” may have been affected by the tax overpayment. There could be further disarray for those who now need to action an overpayment or check they are paying the right amount of tax.
Further comment from Robyn Lovatt, of financial advice firm Shackleton, said that there is no clear breakdown of how the tax is calculated. She told GB News that interest estimates are input “often without any clear breakdown of how the figures have been calculated”.
She noted the system relies on the previous year’s data, leaving taxpayers “playing catchup with estimated figures that may not reflect reality”.
HMRC stated that it updates tax codes “based on the most recent data available from financial institutions”.
A spokesman said: “We don’t want anyone to overpay or underpay tax. Anyone who thinks the information we have is incorrect should let us know straight away so we can put things right.”
Further HMRC changes are expected as early as Friday (May 22). Child Benefit payments due on next week’s Bank Holiday will be made on Friday, HM Revenue and Customs (HMRC) has confirmed. Those expecting payment on Monday 25 May will instead receive it on Friday May 22.
