9.3 million National Insurance Payments have been incorrectly matched with individuals between 2004 and 2009 and more than a million people received flawed tax demands just before Christmas......meanhuile HMRC staff received £13 Million bonuses in 2010.

That is £800,000 more than they were paid the previous year while people may lose out on their pensions due to HMRC incompetence.

Response to a parliamentary question from the all party group on taxation has revealed that around £1.3 Billion have not been allocated to the right national insurance accounts. In 2004-05, some 1.8 Million P14s were not matched to correct NI accounts while it rose to on average 2 Million for the subsequent years falling to 1.5 Million in 2008-09. The information was provided by David Gauke, the Exchequer Secretary to the Treasury in a written response.

We simply do not know how serious this problem is – it could date back many years. HMRC have to act now to ensure that these records are matched up as soon as possible.There are people who could hit 65 years old before they realise they have a problem. It may be too late for them to act. Everyone’s right to a basic state pension depends on paying National Insurance contributions.

HMRC has been blunder prone and in the past few months it has created confusion through issuing wrong tax codes. In addition, it was forced to admit that 5.7 million people had paid the wrong tax out of which 1.4 Million people would have to pay an additional £1,500.

HMRC sent a letter out to 450,000 pensionsers wrongly claiming that they had not paid enough taxes even though the fault lay with the department.  And now the National Insurance fiasco.

It is bizzare that despite all these problems and errors, HMRC officials have been paid a bonus.  The size of the bonuses were acquired through the FOI act.

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• http://www.dailymail.co.uk/news/article-1350541/Tax-errors-hit-millions-pensions-taxman-loses-1-2bn.html Daily Mail
• http://www.ft.com/cms/s/0/dd7318b6-28b2-11e0-aa18-00144feab49a.html#axzz1CFEAyF8u   The FT's article
• http://www.appgtaxation.org/ The All-Party Tax group