HMRC estimates suggest up to 5m people may have paid an incorrect amount of tax in 2012/2013. The department has begun its end of year reconciliation process (EoYR), two months earlier than usual, and expects to finish the adjustments by October. HMRC says it plans to process overpayments and underpayments together, rather than as separate phases, in order to speed up the process of making corrections to tax gathered under PAYE. HMRC calculates that between 2.1m and 3.5m individuals have paid too much tax, while between 1.2m and 1.6m have paid too little. The average repayment to those who have overpaid is £379, while the average shortfall is £537. Taxpayers who do not complete Self Assessment tax returns and owe less than £50 will not have to pay anything; those with more to pay will start to receive notifications four months earlier than last year, which HMRC says is designed to help them plan their finances further in advance. Most repayments will be handled via changes in the individual’s tax code, while those due a refund will start receiving payable orders from HMRC from next month. HMRC says that 85% of people on PAYE pay the correct amount of tax, and that many of the adjustments are down to changes in an individual’s circumstances over the year. It also says it will be sympathetic to those who say they will have difficulty paying any additional tax due, with the option to spread over a maximum of three years if necessary.