20 million unresolved HMRC tax e-records

HM Revenue and Customs says it’s normal to have “open cases” – unresolved tax e-records – at the financial year end.

But the number of open cases – 20 million – is a record backlog. It means there are millions of PAYE employees who have paid an incorrect amount of tax and HMRC won’t know how much has been under or overpaid until it has reviewed the open cases manually.

Reviewing them is the challenge. The following plots the rise in the number of open cases:

HMRC open cases

1998:  2.5 million

1999: 4.8 million

2001: 8.5 million (at which point 1,250 extra clerical staff were hired to reduce the backlog)

2007: 11.5 million

2008: 16 million

2009: 20 million.

Longer article: ComputerWeekly.com home page

Angela Beech, head of personal tax at accountants Blick Rothenberg, told The Times that the 20 million figure was “horrific”. She said: “It is unbelievable that so many people have not paid the right amount of tax, and it is sometimes difficult for them to claim this money back.”


What is an open case?

Open Cases have been officially described by an HMRC Official as follows:-

“At the year end HMRC’s computer system checks whether the tax an employee has paid in the year is consistent with the year end pay and tax information received from employers. 

The computer identifies discrepancies or fails to match information to a taxpayer’s record in approximately 30% of cases, which are known as open cases, and must be checked manually. 

Open cases are a normal part of the PAYE process and the Department has an annual programme of work to ensure that all of these cases are reviewed and cleared. 

The Department’s management information does not distinguish between cases where forms P14 have not yet been posted to the employees’ record and an open case requiring a manual review as a result of inconsistency.”

Open Cases – Payrollchat [re 2005/6 financial year

HMRC good practice advice on open cases

Millions of tax e-records “lost” – Computer Weekly 2001