The HMRC has a hold over every taxpayer in the country - from making sure we pay the right tax to setting our pension. It's notoriously strict with anyone who makes mistakes about their income, often demanding back-payments and penalties with interest.
But complaints about HMRC's own errors seem to be increasing...
Elizabeth Jenkins has been one of the lucky ones. After chasing the HMRC for her £33 rebate, the pensioner from Bournemouth was somewhat surprised to find a cheque for a whopping £1.5m land on her doormat.
Elizabeth told Watchdog:
"What I thought immediately was how nice it would be to have that amount of money and things went through my mind about what I would do if it was mine."
"What I would like to do is, if I can keep it, is put it in a frame and hang it on the wall and look at it occasionally and imagine I'm a millionaire".
When it comes to the HMRC we hear fewer tales like Elizabeth's and more stories like Andy Wigg's. After waiting for nearly seven months and, several excuses of backlogs and computer glitches later, he is beginning to lose patience.
Andy said, "The operational system they've got at HMRC is shambolic, there are not enough people on the front line to be able to make decisions, look at individual cases. The people you speak to, all they do is look at a screen and say somebody will get back to you."
He is owed around £700 on his pension contributions for previous tax years and in November sent off a letter to get it back. Then in March, he was told his files had been lost:
"I was becoming very, very frustrated and actually angry that money that I'd over paid in tax and was due as a rebate was sitting in the government's tax funds, and I wanted it back," said Andy.
Self-employed taxpayers claiming for the latest financial year are not getting any more luck. Richard Lavier, an electrical contractor is owed £1,700 by HMRC but has been told that they are not processing claims at the moment.
Richard is not impressed. He said, "If I ran my business the way that Inland Revenue runs theirs I wouldn't be in business very long."
His wife Wendi, who deals with his tax affairs, agrees: "If this was any other company on earth we would have some recourse, we could take them to a small claims court. But you can't do that with the Inland Revenue, they hold all the cards."
This case is just one of many and we have even heard of one man who was £53,000 out of pocket for over nine months. Despite holding on to that money for all that time, HMRC didn't refund him even a penny's worth of interest.
But if you are late with your taxes you'll have to pay interest in excess of the Bank of England base rate. You may also be liable for a 5% surcharge.
Senior tax accountant Mike Warburton, understands that penalties are needed to induce some people to pay but feels that the balance of power falls too heavily on the side of the HMRC.
Mike said, "The way the system works at the moment with interest and penalties is too harsh on the tax payer and unfortunately because it's one sided we have no comeback against HMRC."
On top of all this, HMRC's recently brought out a whole new set of penalty rules. They can now fine you if they even suspect you've made a mistake.
Watchdog has found that despite being quick to hand out penalties and fines, the HMRC has made enough of their own mistakes. In 2007 they lost a disc containing the details of all 25 million child benefit claimants and just two weeks ago they admitted sending 50,000 tax records to the wrong people.
While vast numbers like these make the headlines, it is the individual taxpayers like Kath Holt that can get the nastiest shock. For her, it seemed that rumours of her death in the HMRC system had been more than a little exaggerated.
So much so, that last October her husband received a letter from the HMRC - addressed to the executor of the late Mrs K Holt. She has since been resurrected by the HMRC, not once, but three times over her lifetime - quite an achievement.
"They still had me as dead, even though HMRC had categorically assured me that my account was brought up to date and there shouldn't be any more problems," said Kath.
HMRC blamed a computer problem for mistakenly killing off Kath and it seems the technology has created a new problem. According to a recent memo from HMRC, up to 100,000 people are now paying too much tax because they've been put on the wrong code.
One company, which has just under 25,000 former employees, says it has received more than a thousand calls since January from its pensioners querying their tax codes. But some people haven't just had one mix-up with their tax codes.
83 year old Richard Mills has received eleven different tax codes since January. Having retired 23 years ago and with no change in circumstance, he was surprised to find 11 letters with different tax codes arrive through his letterbox.
With two private pensions, and an income under £10,000, he hasn't had to pay tax since he retired. Suddenly this year, HMRC told him he should pay tax. They lowered his allowance, and took it straight out of his pension two months in a row.
His son Alan, has been looking after Richard's affairs.
"He got no income in March, no income in April and they still took a little piece in May and only now it's beginning to return to normal," said Alan.
"Essentially by lowering his tax code the error it's cost him £408 that he shouldn't have paid and as of this moment he hasn't had that money back."
Lesley Strathie, Chief Executive Officer, HMRC:
"HMRC wants to deliver a first class tax service. We are acutely aware that we sometimes fall short of our ambition. The numbers of people we deal with every year, sometimes on extremely complex issues, are simply enormous. We handle around 1.2 million telephone calls a week and receive some 74 million letters a year. It only takes a small number of our transactions to go wrong for a lot of people to be affected. That's why I am determined to make the services we provide as good as they can possibly be. I accept that we still have a long way to go and I apologise to those who have had problems.
The vast majority of people who do business with HMRC do not experience problems. They are taxed correctly and have their correspondence dealt with in a reasonable time. I know, however, that this is of little consolation to all those who have not received the effective and efficient service we aim to provide.
We will continue to focus our resources onto those areas where we must improve. I am grateful to those customers who have taken the time and trouble to tell us about their experiences. I will ensure that HMRC learns from this feedback to deliver the best possible service to all our customers within the resources available to us."
HMRC... the taxman cometh!
But complaints about HMRC's own errors seem to be increasing...
Elizabeth Jenkins has been one of the lucky ones. After chasing the HMRC for her £33 rebate, the pensioner from Bournemouth was somewhat surprised to find a cheque for a whopping £1.5m land on her doormat.
Elizabeth told Watchdog:
"What I thought immediately was how nice it would be to have that amount of money and things went through my mind about what I would do if it was mine."
"What I would like to do is, if I can keep it, is put it in a frame and hang it on the wall and look at it occasionally and imagine I'm a millionaire".
When it comes to the HMRC we hear fewer tales like Elizabeth's and more stories like Andy Wigg's. After waiting for nearly seven months and, several excuses of backlogs and computer glitches later, he is beginning to lose patience.
Andy said, "The operational system they've got at HMRC is shambolic, there are not enough people on the front line to be able to make decisions, look at individual cases. The people you speak to, all they do is look at a screen and say somebody will get back to you."
He is owed around £700 on his pension contributions for previous tax years and in November sent off a letter to get it back. Then in March, he was told his files had been lost:
"I was becoming very, very frustrated and actually angry that money that I'd over paid in tax and was due as a rebate was sitting in the government's tax funds, and I wanted it back," said Andy.
Self-employed taxpayers claiming for the latest financial year are not getting any more luck. Richard Lavier, an electrical contractor is owed £1,700 by HMRC but has been told that they are not processing claims at the moment.
Richard is not impressed. He said, "If I ran my business the way that Inland Revenue runs theirs I wouldn't be in business very long."
His wife Wendi, who deals with his tax affairs, agrees: "If this was any other company on earth we would have some recourse, we could take them to a small claims court. But you can't do that with the Inland Revenue, they hold all the cards."
This case is just one of many and we have even heard of one man who was £53,000 out of pocket for over nine months. Despite holding on to that money for all that time, HMRC didn't refund him even a penny's worth of interest.
But if you are late with your taxes you'll have to pay interest in excess of the Bank of England base rate. You may also be liable for a 5% surcharge.
Senior tax accountant Mike Warburton, understands that penalties are needed to induce some people to pay but feels that the balance of power falls too heavily on the side of the HMRC.
Mike said, "The way the system works at the moment with interest and penalties is too harsh on the tax payer and unfortunately because it's one sided we have no comeback against HMRC."
On top of all this, HMRC's recently brought out a whole new set of penalty rules. They can now fine you if they even suspect you've made a mistake.
Watchdog has found that despite being quick to hand out penalties and fines, the HMRC has made enough of their own mistakes. In 2007 they lost a disc containing the details of all 25 million child benefit claimants and just two weeks ago they admitted sending 50,000 tax records to the wrong people.
While vast numbers like these make the headlines, it is the individual taxpayers like Kath Holt that can get the nastiest shock. For her, it seemed that rumours of her death in the HMRC system had been more than a little exaggerated.
So much so, that last October her husband received a letter from the HMRC - addressed to the executor of the late Mrs K Holt. She has since been resurrected by the HMRC, not once, but three times over her lifetime - quite an achievement.
"They still had me as dead, even though HMRC had categorically assured me that my account was brought up to date and there shouldn't be any more problems," said Kath.
HMRC blamed a computer problem for mistakenly killing off Kath and it seems the technology has created a new problem. According to a recent memo from HMRC, up to 100,000 people are now paying too much tax because they've been put on the wrong code.
One company, which has just under 25,000 former employees, says it has received more than a thousand calls since January from its pensioners querying their tax codes. But some people haven't just had one mix-up with their tax codes.
83 year old Richard Mills has received eleven different tax codes since January. Having retired 23 years ago and with no change in circumstance, he was surprised to find 11 letters with different tax codes arrive through his letterbox.
With two private pensions, and an income under £10,000, he hasn't had to pay tax since he retired. Suddenly this year, HMRC told him he should pay tax. They lowered his allowance, and took it straight out of his pension two months in a row.
His son Alan, has been looking after Richard's affairs.
"He got no income in March, no income in April and they still took a little piece in May and only now it's beginning to return to normal," said Alan.
"Essentially by lowering his tax code the error it's cost him £408 that he shouldn't have paid and as of this moment he hasn't had that money back."
Lesley Strathie, Chief Executive Officer, HMRC:
"HMRC wants to deliver a first class tax service. We are acutely aware that we sometimes fall short of our ambition. The numbers of people we deal with every year, sometimes on extremely complex issues, are simply enormous. We handle around 1.2 million telephone calls a week and receive some 74 million letters a year. It only takes a small number of our transactions to go wrong for a lot of people to be affected. That's why I am determined to make the services we provide as good as they can possibly be. I accept that we still have a long way to go and I apologise to those who have had problems.
The vast majority of people who do business with HMRC do not experience problems. They are taxed correctly and have their correspondence dealt with in a reasonable time. I know, however, that this is of little consolation to all those who have not received the effective and efficient service we aim to provide.
We will continue to focus our resources onto those areas where we must improve. I am grateful to those customers who have taken the time and trouble to tell us about their experiences. I will ensure that HMRC learns from this feedback to deliver the best possible service to all our customers within the resources available to us."
HMRC... the taxman cometh!