In reality many thousands of people have been affected, paying on average around �150 too much tax

Edward Leigh Committee chairman

In their report, the MPs observed: "Although initially they thought this would result in a net loss of �2 million to the Exchequer, later work indicated that it was more likely to have led to a net gain of �18 million, at the expense of individual taxpayers who might have overpaid tax by as much as �22 million."

According to the committee, it appears that of the 1.04m taxpayers involved, 87% would have been taxed at the correct level.

But that left 134,000 people who might have paid either too much or too little.

"A typical average overpayment might be �148," the committee said.

The reason behind the decision to abandon the normal checking procedures at the Revenue came after problems with an interface between a new national insurance computer system (NIRS2) operated by Accenture - formerly Anderson Consulting - and the PAYE computer system operated by EDS.

The committee acknowledged that Accenture and the Revenue had since drawn up a revised working agreement.

The Revenue has been attempting to contact anyone who overpaid.

Attempts to contact

Public accounts committee chairman Edward Leigh said: "Although it would not be reasonable to expect the Inland Revenue to make extensive administrative effort in order to find every last penny of possible tax overpayment, in this case it was a mistake to take this action without knowing the impact on individuals.

"In reality many thousands of people have been affected, paying on average around �150 too much tax - a significant sum for most people.

"I am pleased that Inland Revenue has now, albeit belatedly, contacted the taxpayers who might have lost out, and hope that taxpayers' interests will not be disregarded in such a cavalier fashion in future."