HM Revenue & Customs (HMRC) has revealed that as many as 4.7 million people didn’t pay the right amount of tax during the 2010-11 tax year.

This is bad news for roughly 1.2 million people who underpaid through the pay as you earn (PAYE) system – these individuals owe between £500 and £600 on average according to HMRC estimates, which amounts to a total debt of approximately £660 million.

The majority of people who paid the wrong amount actually overpaid, however, with between 1.7 million and 3.5 million people estimated to be in line for a rebate. The average figure for overpayment is expected to be around £340.

Each year, HMRC compares the amount of tax and national insurance deducted by employers with the data on its own files. Last September, a new IT system revealed millions of inconsistencies, and around 1.4million people had to pay back an average of more than £1,000.

The people most likely to have paid the wrong amount of tax are those who have moved jobs, started earning a second income, or received a new employment or retirement benefit they weren’t previously getting.

HMRC will begin checking employer data against its own records from mid-July – people eligible for a refund can expect to receive it by the end of September. The majority of those who have underpaid won’t be billed – they will have their tax code changed so that what they owe can be deducted from their salary over the next tax year.

Last year, HMRC wrote off any debts below £300 due to its own errors, but this year the threshold has reverted back to the default £50. Anyone who can’t afford to repay HMRC has been invited to contact them and discuss possible arrangements.

The annual audit on the UK’s PAYE records has revealed that an estimated 4.7 million people paid the incorrect amount of tax in 2010/11. Later this year, they will all receive letters detailing the amount that they owe or will be reimbursed.

This is not the first time HMRC have been publicly humiliated for taxation errors. Back in September of 2010, it was revealed that a staggering 5.7 million people had paid the wrong amount in taxes between 2008/2010. As a gesture of good will, those with underpaid tax bills of under £300 had the outstanding amount written off. However, this year the government will be enforcing tighter measures to reclaim any outstanding balances.

Worst hit by the latest blunder will be those claiming a state pension for the first time, some 160,000 people with average balances of £600. With outstanding balances of £50 or more being pursued this time around, there will be very little anyone can do to avoid these unexpected repayments.

Of those claiming a state pension for the first time, many were unknowingly continuing with their full personal allowances, meaning that underpayments in excess of £1000 were accumulated over the course of the year. Unfortunately for them, this will be deducted from an already meagre state pension. Mike Warburton of accounting firm Grant Thornton says, “I have a particular concern about pensioners, not simply because many would find it difficult to pay the tax, but because they are often caught out with underpayments”.

On the up side, a spokesperson for HMRC announced that a new computer system is now in place meaning that there should be fewer errors in the future. We shall have to wait and see.

Moneyfacts have released new data showing that interest rates on new mortgages are currently at their lowest level for 23 years. This has been put down to the greater ease with which lenders can raise funds through the financial markets at a time when there is no imminent prospect of the Bank of England raising its base rate above 0.5%.

The average two-year fixed rate mortgage is now 4.32% interest, with three-year fixed deals averaging 4.92% and five-year fixed deals at 5.92%. The average interest rate for a two-year tracker is currently 3.37%.

The benefits of lower rates may be limited for many consumers, as low rates are often coupled with high arrangement fees, and the majority of deals still require borrowers to pay a minimum 20% deposit.

Michelle Slade at Moneyfacts said “Lenders appear to be applying cuts equally across all loan-to-value (LTV) tiers, which is good news for first-time buyers, as previously cuts were only being applied to the lower LTV bands.”

Until recently, experts were predicting that the base rate would increase as soon as September, but the poor performance of the economy, and the decision by a new member of the Bank of England’s rate-setting committee to vote against changing the rate, means rates are unlikely to rise until well into 2012.

Inevitably, interest rates will rise at some stage. Anyone opting for a variable rate mortgage therefore needs to think carefully about whether they will be able to afford this when the monthly repayments increase.

Indeed, Richard Banks (chief executive of UK Asset Resolution) has warned that Britain will face a ‘tsunami’ of house repossessions when interest rates do eventually go up. UKAR is responsible for running the nationalised mortgages of Bradford & Bingley and parts of Northern Rock.

Yesterday, the price of crude oil dropped by as much as $8 a barrel after a surprise move by the International Energy Agency (IEA) to release emergency reserves. This was done to compensate for lost shipments from Libya, according to the IEA.

In response to this, retail powerhouse Tesco announced today that it has slashed 3p a litre off the price of petrol and diesel on its forecourts. With prices recently peaking at 136p a litre for petrol and nearly 140p for diesel, this will certainly ease the burden a little for motorists, but groups such as the AA have suggested that the full benefit of the drop in the price of oil won’t be passed to consumers.

In the past, falling oil prices have provoked nominal price-wars between supermarkets, but the benefit for consumers has been limited.

Paul Watters, head of AA public affairs, said “We hope this oil price crash will lead to a price war on UK forecourts, but we remember post-Hurricane Katrina when a 4p drop in wholesale petrol prices took nearly three months to be reflected in its entirety at the pump.”

Experts have suggested that there were various political motives for the IEA’s move. These include punishing Iran and Venezuela for failing to cooperate with the Organization of the Petroleum Exporting Countries (OPEC), weakening the Iranian government, improving relations between the US and Saudi Arabia, and undermining the alternative energy industry.

The IEA has insisted the move was simply about easing a shortage, and not about prices. However, just a few weeks ago, the OPEC alliance failed to approve an increase in production.

It remains to be seen whether Tesco’s decision to reduce prices by 3p a litre will trigger a price-war, but any fall in prices at the pumps is likely to be welcomed by consumers.

According to consumer research group, Markit, families are continuing to feel the pinch of the recession with consumer finances deteriorating at an alarming rate. It is reported that the rate at which consumers’ finances are deteriorating is at its fastest since 2009.

The recent report states that 36%of UK households were in a worse financial situation in May than in April, whereas only 6% claimed they were in an improved situation. As a result, many households have had to resort to using savings and taking out loans just to keep up with the increased living costs. 29% of the households surveyed claimed to have spent more in June and around 50% of all households expect the situation to worsen in the coming months.

83% of households are bracing themselves for further increases in living costs as a result nof increased inflation. The current rate stands at 4.5%, more than double the Government’s target level of 2%. Increased energy costs and fuel prices are largely to blame. 20% of households resorted to credit cards or bank loans in May, the highest rate in over two years.

Job security is still an area for concern, the report suggests. 22% of people felt that their jobs weren’t secure whilst 6% felt more confidence. The East of England has been worst hit by falling house prices with all other regions also reporting drops, excluding London.

Housing charity Shelter has revealed statistics on home repossessions in the UK. The findings identified several areas as ‘repossession hotspots’, with Corby in the East Midlands recognised as the area at most risk. It is estimated that 7.56 people in every 1000 will lose their homes.

Other key areas where homeowners are considered to be at risk of having property repossessed include Harlow, Manchester, Dagenham, Knowsley and Peterborough to name but a few.

The number of repossessions in the UK saw a dramatic increase at the beginning of 2011 whilst the number of jobless increased by 3.3% in local authority areas. Unemployment levels and the number of repossessions are undoubtedly linked; areas identified as having low levels of repossession have an average unemployment rate of just 1.4%, less than half of that seen in high-risk areas.

It has been reported that in excess of 13,000 applications for repossession orders were made between January and March of this year. This figure looks set to rise as unemployment is forecasted to increase towards the end of the year as a result of public sector cuts. Experts are predicting a staggering 45,000 homes will be repossessed in the next 12 months.

Lenders have been subject to a great deal of criticism for lending irresponsibly although many fingers would point towards loss of income as the main cause of the problem, a factor out of the hands of the lenders. This, combined with rising inflation rates, increased living costs and static wages will mean the situation can only worsen.

Today, the Citizens Advice Bureau (CAB) published a report entitled Desperate Times, desperate consumers, which details the extent to which rogue traders and con artists are thriving in the current economic climate.

At a time when people are looking to cut their spending and boost their income, “money-making scams and sharp practices disguised as sources of help” are becoming increasingly prevalent.

Speaking at the Trading Standards Institute conference in Bournemouth today, Citizens Advice Chief Executive Gillian Guy said “consumers need advice, enforcement, regulation and redress agencies to work even more closely to stamp out fraud and scams”.

Common scams include people advertising jobs that don’t exist, and charging upfront fees to those who express an interest in the position. One man from the West Midlands paid a £1,000 fee for a job as a film extra that was advertised on the Government’s Jobcentre Plus site.

The National Audit Office (NAO) last week published its own report, which said that funding cuts will leave trading standards departments underequipped to tackle these kinds of issues. Amyas Morse, head of the NAO, said that UK customers were wrong to think they were well-protected.

The Government now plans to scrap the Consumer Focus watchdog, transferring advocacy of energy consumers’ rights to the CAB. Citizens Advice is also due to take over the Consumer Direct helpline.

An Individual Voluntary Arrangement (IVA) is a government-endorsed solution for people whose monthly debt repayments and living costs exceed their income, allowing them to pay a manageable amount. IVAs are normally chosen by people who are unable to cope with unsecured debts they have taken out, such as personal loans or credit cards.

If you have a mortgage or other secured borrowing such as a debt consolidation loan, the provider has lent you the money on the basis that the value in your property gives them a means of recouping their losses if you stop making repayments. Because mortgages tend to be large sums, providers need a means of offsetting the risk they are taking by lending you the money. Similarly, debt consolidation loans tend to be utilised by those with a poor credit history, so lenders secure the debt to minimise the risk they are exposed to. Therefore, these providers have a legal guarantee which ensures that, in the event you fail to make the agreed payments, they can force you to sell your house in order to repay the loan.

For this reason, it is highly unlikely that these companies would be willing to agree to take reduced payments within the terms of an IVA. Simply put, IVAs are not designed for situations where borrowers are struggling to repay large secured debts.

That doesn’t mean you can’t set up an IVA if you have a mortgage or another secured loan. If you also have various other unsecured debts that you’re having difficulties repaying, we may be able to arrange an IVA that addresses those debts. If you don’t want to lose your home, however, you need to ensure you keep up the monthly repayments on any secured borrowing.

In the current economic climate, there is widespread anxiety about the availability of jobs, and about the ability to maintain a decent standard of living when prices are soaring and incomes are stagnating.

This morning, the Office for National Statistics released its quarterly update on the UK labour market, which provides figures for the period from February to April 2011. Compared with the previous quarter, unemployment has dropped by 88,000 and the number of people working has risen by 80,000. The fall in unemployment was the largest quarterly drop since June-August 2000.

70.6% of those eligible to work were in employment, meaning 29.24 million people had jobs. The unemployment rate was 7.7% (2.43 million people).

Although the unemployment level has fallen, the number of people claiming Jobseeker’s Allowance has increased by 19,600 to 1.49 million, which is the highest for more than 12 months. The current number of people in work is 333,000 less than when employment levels peaked in May 2008, before the recession hit.

The quarterly drop in unemployment levels was almost completely accounted for by 16 to 24-year-olds – unemployment in this age group was cut by 79,000 to 895,000, which is the lowest figure for two years. However, the unemployment rate for 16 to 24-year-olds remained high at 19.3% (more than double the national average).

Average annual earnings increased by 1.8% in the year ending April 2011, with average weekly pay reaching £460. A decrease in bonuses paid by private firms skewed these figures somewhat. Nevertheless, the 1.8% increase remains significantly lower than the 4.5% annual rate of inflation.

The latest data suggests there are some grounds for optimism, but for people struggling to find work or make ends meet on meagre salaries, the outlook may still seem pretty bleak.

Anyone who has had the misfortune of dealing with bailiffs as a result of Council Tax arrears will no doubt understand what a distressing ordeal it can be. Many of us at some point or another have been left in the red and have been unable to keep up with council tax payments for one reason or another. It is extremely important to keep up with Council Tax payments but in some cases, non-payment is simply unavoidable.

Before you know it, debts soon mount up and bailiffs are brought in to collect the debt. However, many people are unaware of their legal rights when it comes to dealing with bailiffs. There are many complex laws surrounding bailiffs but there are a few main points that should always be remembered.

1 – You don’t have to let bailiffs into your home. As long as you haven’t allowed entry in the past to collect for the current debt, you don’t have to allow entry to the bailiff, regardless of what they tell you. Nor can they forcibly enter your home. Keep windows and doors locked otherwise they can enter through them legally. Contrary to popular belief, bailiffs cannot get the police, locksmiths or nay other means to help them break in. If police do attend, they are there purely to keep the peace.

2 – If you do allow entry to the bailiff, there are only certain goods that they can take. It is not permitted for them to remove items that are rented or items that belong to someone else. They cannot remove goods that are essential for your employment, business or vocation (although this is quite vague and most bailiffs will have a different idea of what this entails). If you think that goods have been wrongfully taken, you should lodge a formal complaint against your bailiff.

3 – Every bailiff should have certain documentations such as photographic ID and written authorisation from their visit from the council. If they fail to produce either of these, do not allow entry under any circumstances.

4 – To avoid removal of goods, you should contact your bailiff and arrange monthly repayments to cover the amount of the debt. You should make sure that the repayments are a realistic and affordable amount. Failure to keep up with repayments could worsen the situation.

5 – Contact your local council with a proposal for monthly repayments. In some circumstances, councils will take the account back from the bailiff and you can repay them directly.

6 – bailiffs will charge for visits to your home and the amount will be added to your outstanding debt. Try to avoid this by resolving the situation as quickly as possible. By law, creditors must give 14 days warning before a bailiff is assigned to an account. In this time, contact the council and arrange repayments to avoid extra charges. For council tax arrears, bailiffs can charge a maximum of £42.50. If the amount exceeds this, you must dispute it.

There are ways of resolving debt situations other than bowing down to the bullyboy tactics of bailiffs. There are plenty of free resources available to find out more about how to deal with bailiffs.