Overview
- Automated use of annual bank data has caused HMRC to change PAYE codes and bill savers for interest they did not earn or that was held in tax‑free ISAs.
- Investigations found multiple error types including flawed estimates, duplicated interest, misattributed accounts, and ISA interest being treated as taxable.
- Some individual cases show large harms, for example an HMRC estimate that overstated untaxed interest by thousands and led to reduced take‑home pay until corrected.
- Banks such as Zopa say they corrected wrongly reported ISA data but some customers still received unexpected bills, suggesting delays in HMRC processing.
- The system was created by a 2016 rule requiring banks to send annual savings data to HMRC and officials now promise verification, reporting changes and longer‑term reforms.