As winter tightens and household budgets strain, Britain’s tax authority has plunged tens of thousands of people into confusion, anger, and fear. From “double-billed” savers to families wrongly stripped of child benefits, and a fresh plan to take money directly from people’s bank accounts, HM Revenue & Customs (HMRC) faces growing accusations of heavy-handedness and systemic dysfunction.

Double Tax Demands: A Costly HMRC Blunder.

Thousands of UK savers have been left bewildered after receiving multiple “simple assessment” tax demands from HMRC for the 2024–25 tax year, some appearing to double-count the tax already paid.

The Telegraph first reported that savers were sent initial “simple assessment” letters demanding tax, followed by second letters including additional tax owed on savings interest plus the full amount from the first letter. In several cases, recipients who had already settled their earlier bills were told to pay again.

Tax adviser Joseph Adunse, a partner at Moore Kingston Smith, said:

“In the rush to collect as much tax as possible, HMRC has been sending several simple assessment letters to bewildered taxpayers. The agency has bypassed its vast data warehouse and is sending affected taxpayers a total tax bill, including tax that was demanded in an earlier letter.”

Experts warn the letters are so poorly worded that many may panic and overpay, especially ahead of Christmas. The risk, Adunse added, is “real and immediate”,  particularly for pensioners and low-income savers unaccustomed to deciphering tax correspondence.

The Systemic Cause: Data Lag And Policy Pressure.

The chaos stems partly from the way HMRC collects data on savings interest. Banks and building societies submit annual reports showing interest earned, but these arrive after many assessments have already been sent. HMRC then issues follow-up letters, which merge both figures rather than clearly separating them.

The result, according to the Institute of Chartered Accountants in England and Wales (ICAEW), is that “simple assessments may contain errors” and taxpayers should “carefully check whether the amounts demanded overlap.”

The issue has been compounded by frozen tax allowances and rising interest rates. Basic-rate taxpayers can earn £1,000 of savings interest before paying tax, while higher-rate taxpayers get £500, limits unchanged since 2016. As savings rates surged past 5% this year, many who previously earned below the threshold have now become liable.

HMRC insists that it only issues simple assessments “after receiving information from banks,” and says its letters “clearly explain how customers can pay what they owe.” Yet the official guidance published in its October Agent Update quietly admits that the second letter “shows the total amount due, including sums already paid,” meaning recipients must manually deduct previous payments, a recipe for confusion.

Last year alone, HMRC issued 1.3 million simple assessments, up nearly 75% on the previous year, as part of its drive to close the £44 billion tax gap.

‘Kafkaesque’ Child Benefit Suspensions:

If savers are being stung by bureaucratic overreach, families have been left reeling by another HMRC fiasco: the mass freezing of child benefit payments after faulty border data flagged parents as having “emigrated.”

The Guardian revealed this week that HMRC had suspended payments to 23,489 families, around 0.5% of all claimants, after travel data suggested they had left the UK. The department now admits the suspensions were often wrongly applied.

Among those affected were parents who had merely taken short holidays, often through Dublin airport, which lacks full UK re-entry records.

One mother, Cerys, a freelance music teacher from Liverpool, said she received a suspension notice after taking her autistic children on a one-day trip to Amsterdam to familiarise them with flying.

“It does feel like you’re being punished for going away,” she told The Detail. “Child Benefit is saying there’s no evidence I returned with my family, they want GP letters, bank statements, and school records. We left at 6am and were home by bedtime.”

Another claimant, Mark Blackmore, a theatre technician from Kent, said he was “absolutely raging” after being forced to prove he lived in his own country.

“They sent the letter to my home address, and it isn’t in Spain,” he said. “I even sent HMRC an invoice for wasting my time.”

The crackdown began in August as part of a wider government campaign to curb benefit fraud, with ministers promising to save £350 million. But the scheme relied heavily on flawed travel data that failed to account for people returning via different routes or airports.

Facing backlash, HMRC this week apologised and paused the crackdown, saying it was “urgently reviewing” the process. It pledged to start checking employment and benefits data before cutting payments in future. “We are very sorry to those whose payments have been suspended incorrectly,” the agency said. “They should respond to us so we can reinstate payments and ensure no one is left out of pocket.”

But for affected families, particularly those with disabled children or freelance income, the disruption has already been devastating. “It’s humiliating,” said another parent from Durham. “You have to prove you exist in your own country.”

‘Direct Recovery Of Debts’: HMRC’s Power To Raid Bank Accounts.

Amid these controversies, HMRC is also reactivating one of its most controversial powers, Direct Recovery of Debts (DRD), which allows it to seize money directly from taxpayers’ bank accounts.

The scheme, paused during the pandemic, will now target individuals or companies owing £1,000 or more who “can afford to pay but choose not to.” HMRC says it will leave at least £5,000 untouched to cover essentials like rent and utilities.

Critics say the move risks eroding public trust even further. The Low Income Tax Reform Group (LITRG) warned that while vulnerable taxpayers are supposed to be excluded, “it remains unclear how HMRC will identify them or what support will be offered.”

Tax fairness campaigners have also questioned the timing. “When HMRC is sending out erroneous tax demands and wrongly cutting benefits, it shouldn’t also be arming itself with powers to raid bank accounts,” said one policy analyst. “It undermines confidence in the entire system.”

Between 2016 and 2018, HMRC used DRD just 19 times, recovering £361,000 in total. But under new targets to reclaim £44 billion in unpaid tax and credits, use of the power could accelerate sharply.

A Crisis Of Trust:

The cumulative effect of these three developments, flawed tax demands, wrongful benefit suspensions, and aggressive debt collection, has left HMRC facing a crisis of credibility.

For many Britons, the tax office has become emblematic of a wider bureaucratic malaise: data-led but error-prone, eager to demand but slow to apologise. Each blunder exposes deeper issues, inadequate cross-checking, insufficient oversight, and a willingness to prioritise revenue over fairness.

As one chartered accountant put it:

“The principle of taxation by consent depends on trust. HMRC is eroding that trust by acting first and verifying later.”

What’s Next:

Pressure is now mounting on the Treasury to intervene. Opposition MPs are calling for an independent inquiry into HMRC’s processes and an automatic compensation scheme for wrongly suspended benefits. Consumer groups are urging anyone who receives a duplicate simple assessment to contact HMRC before paying, and to keep detailed records of all correspondence.

Meanwhile, the government’s broader campaign against tax avoidance and benefit fraud is likely to intensify heading into 2026, even as the human toll of bureaucratic mistakes becomes increasingly visible.

In an economy already marked by rising living costs and stagnant wages, HMRC’s latest missteps risk becoming more than a series of scandals, they may signal a breaking point in the social contract between citizens and the state.