by business editor Trevor Sturgess

A Kent firm is warning taxpayers that an official blunder could hit them in the pocket.

Canterbury-based Burgess Hodgson says PAYE employees may face higher tax bills after HM Revenue and Customs made coding errors.

Although the tax collectors say they are addressing the problem, thousands of faulty coding notices have already been issued. Employees could get a nasty shock when they open their April pay packet and find it up to £100 lighter.

Coding notices tell taxpayers how large their personal tax allowance will be in the coming tax year, and how much tax their employers should deduct.

But the onus is on employees to spot the error. Burgess Hodgson says that’s not easy when they don’t know what they’re looking for. If they don’t spot it and tell HMRC, then their employer is given the wrong information too and the employee is left short-changed.

Tax partner Mike Horne said the amount for basic rate tax payers could be a "couple of hundred pounds" but "significantly more" for higher earners.

"The problem of a wrong coding notice is that the employer has to operate it - even if it is obviously wrong," he said.

"Some people will therefore end up paying far too much tax – resulting in potentially short-term cash problems until HMRC sorts it out - or too little or get a refund, with an unpleasant or unexpected bill at a later stage."

HMRC has acknowledged the problem and blamed a glitch in its new computer system.

"The vast majority of notices will be correct but there will be cases where, because the data carried over from our old systems does not match employers’ data, some people receive an incorrect coding notice or more than one coding notice for the same employment because of these discrepancies."

It says revised coding notices will be sent out as soon as possible, and that it is giving priority to "vulnerable" individuals.

Mr Horne urged taxpayers to check their code and contact HMRC if they think it is wrong. "Anyone under PAYE needs to make sure they understand what their tax code means," he said.