A fifth of all tax records held by HM Revenue & Customs could contain errors, an internal review has concluded.
Of the 45 million employment files held by HMRC, as many as nine million contain mistakes, according to the review.
The flaws identified in the records came to light after thousands of taxpayers started to receive letters from HMRC relating to billions of pounds of tax paid incorrectly between 2008 and this year.
According to reports, as many as 1.4 million people are facing demands to repay an average of £1,428.
Disclosure of the possible extent of the errors has prompted calls for significant changes to the tax system. According to the Telegraph, an all-party group of MPs will today tell the Treasury that HMRC is "a 19th century organisation" in need of fundamental reform.
Yesterday it emerged internal HMRC fears over the accuracy of the tax authorities' employment records date back to the beginning of the year when a new computer system was activated and began generating tax codes for 2010/11.
Defects in the way the £400m computer system recorded each taxpayer's employment history meant that many of the 2010/11 tax codes generated in January were wrong.
Because of those errors, HMRC ordered a full review of all 45 million employment records it holds. The review identified a total of 9.3 million records "potentially at risk of error".
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