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Are HMRC Bullsh*tting Me?

Client has p/t employement income (at a school) and p/t self-employed income from her home-based business. All personal allowances are utilised against PAYE income. Tax return was submitted online in September 2012.

Amounts "currently" owed are:

31 Jan 2013: £980 (balancing payment for 2011/12)

31 Jan 2013: £1,200 (1st payment on account 2012/13)

31 July 2013: £1,200 (2nd payment on account 2012/13)

Box 2 of "Finishing Your Tax Return" on her SA100 return states "if you owe tax for 2011-12 and have a PAYE tax code, we will try to collect the tax due (if less than £3,000) through your tax code for 2013-14, unless you put 'x' in the box"

The helpsheet TRG 22 adds:

"If you owe tax of less than £3,000, and you have filed your return by 30 December, we will try and collect it through your 2013–14 PAYE tax  code, if you have one."

The Revenue, most lately in the form of the (alleged) Business Payment Support Service, refuse to collect 2011-12's £980 through PAYE on the grounds that the total amount owed is £3,580 ie more than £3,000. I say the amount due is only £2,180 because the second instalment (of July 2013) is not yet due. My tax software (FTax) supports my view, having churned out a SA100 Payments Summary containing a £980 deduction from the January 2013 payment entitled "Adjustment due to change in 2013-14 tax code".

Does anyone please have any links that might support our case that the amount owed is less than £3,000 (so that 2011-12's £980 balancing payment can be collected via 2013-14 PAYE code)? 


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POA for 11/12

You can only code out the POA for the year of the return, not the forthcoming year. Has your client actually paid the amounts due for 2011/12 or does your software just assume they have?

The computer will also look at whether it is physically possible to collect that amount from the salary - don't forget that any code number is only allowed to collect up to 50% of the income as tax. The effective test they operate is was last years tax deduction on P60 more than the tax collectable. If not it will be very difficult to make HMRC change the code even if client agreeable

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14th Jan 2013 19:54

Thanks Marion,

We're trying tro code out 2011-12 balancing payment, to 2013-14 paye coode, which I guess is the standard route.

Revenue agree that 2011-12 is otherwise paid up.

Client has a full tax code to set against PAYE for 2013-14, and earns p/t salary of circa £9k.

It seems to hinge on the "if you owe more than £3,000"; Ftax software seems to agree with me that the client owes under £3k, so collection via paye should be possible. Collectors are including the July 2013 2nd instalment in the total to bump up the "amount owed" to more than £3k, so as to disqualify the paye collection route.

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14th Jan 2013 22:14

The answer to your subject line question is - yes



EDIT - meant to type SAM141001 (which refers throughout to balancing paymentthough 141010 and the subsequent paragraphs also contain helpful instructions.


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like the new picture but can't quite read the writing - must go to opticians for new eyes in February!

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14th Jan 2013 13:59

Thanks, Marion

I removed the old one as a mark of respect to the family of a departed former member, and uploaded the new one as a tribute to his friends and colleagues that continue to attempt to infiltrate the site :)


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14th Jan 2013 21:51

Well refer them ...

... to the manual content referred to in my post above. It's pretty clear. The Collectors are wrong and if they insist they are right, escalate it.

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15th Jan 2013 10:55


Thanks BKD, you're a star! That's exactly the link I needed. I think I must have missed it last night because I too was dazzled by your Duck avatar :)

Now to have a third attempt with the ex-traffic warden employed at HMRC's alleged Business Support Payment Helpline. I keep getting the same one - he sounds like Duncan Banatyne's slightly meaner brother: I keep expectin' him to shout "Ludicrous!" - so far he has wasted a total of 3 hours of my time digging his heels in over this matter and other obstacles. Note to HMRC: that obstructive individual is costing you a lot of money - this'll end up with debt management by the end of the summer with zero paid on account. Ludicrous!

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15th Jan 2013 11:09

Agent Account Manager

Escalate the complaint to your Agent Account Manager.

It's worth a complaining e-mail and an escalation, even if it's just to waste their time back. And there's no point in arguing with an idiot.

PS - clicking on avatars makes them more legible.





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Collector or Inspector

Who are you actually talking to?

The £3,000 limit applies only to past (2011/12) liabilities, not the payments on account for 2012/13 so they should not be even looking at that.

I am afraid that it is not always obvious to them why the computer will not code the underpayment out automatically. My opinion is that the tax paid under PAYE  foir 11/12 would have been about £300. As you are wanting to code out the £980 it will not accept the adjustment without a supervisor override.

What was the payment on account position for 2011/12 i.e. what is tha tax payable before crediting the payments on account?


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15th Jan 2013 21:08


Nick and Marion, I've escalated it (although not before overcoming a few additional artificial barriers introduced by the regular agents' helpline people - not the collectors / alleged business payment support people, but the regular Inspectors' underlings):

First hurdle (the first call I made) was that they were unable to collect the 2011-12 balancing payment of £980 via the 2013-14 code on the grounds that it contravenes their rules in so far as it is more than double the £50 of PAYE tax paid by the client in 2011-12;

Second hurdle (my second call) was that they were unable to collect more than 50% of the gross pay (their interpretation being that the client's £8k gross pay from p/t employment would not allow the £4.9k [£980 @ 20%] coding adjustment required to collect £980 of tax.

Both of the above turn out to be misinterpretations of SAM141020: each is listed under "Exceptions" ie scenarios in which the Revenue should override (via their  RECORD TRANSFER TO COP" routine) the SA automatic checks that automatically disallow the coding out of the payment. In other words, far from being reasons to disallow the coding out they are nothing more than automatic SA checks that are overridable in the event of the taxpayer "appealing" them, which of course is exactly what we are doing.

The final hurdle (third call I made) is that the client earns a consistent £8k from employment and 2013-14's code will be £9,440. Apparenty that makes it impossible to collect via PAYE because coding out £4.9k (ie reducing the code to £3,540) would not collect the full £980 of tax. "We cannot code this out to PAYE where the gross anticipated wage is less than the tax code" I'm informed. Ok, that makes sense. So my suggested solution for the Supervisor is to split the code £8k to employment and £1,440 to self employed earnings; then reduce that £8k code by £4.9k. Simples! Hey, that'll even help lower next year's Sch D taxable profits (by £1,440), thereby falling in with the Payment Helpline's request that we come up with a plan to avoid having to make a payment arrangement in January 2014.

I'll be interested to see what further obstacles the Supervisor might put in the way. Really, what is the matter with these people? They couldn't be more obstructive if they tried. This is a can't pay case, not a won't pay, which will otherwise end up with debt management some time at the end of Summer with little or nothing paid; yet the Revenue seem hell bent on collecting nothing, neither through a PAYE code nor for that matter through an instalment arrangement for the balance!

Thank you both so much for your posts.


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Good luck

Do keep us posted on how this progresses.

The 50% hurdle is a problem at the Payroll operators end but is as you say 50% of salary, not the coding restriction. Considering that the best code I saw was K23750 - not a typo - against a pension of £12,000 the words grasping at straws come to mind. I am afraid you have to tell the computer what it needs to hear to get the right answer.

Asking them to enter an estimate of income for 2013/14 of 18,000 should solve that particular problem.  

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16th Jan 2013 14:50


Had a call from a lady who said she was not a supervisor, but had been allocated my case.

She will not code it out on the grounds that the tax to be collected (£980) is more than double that paid in 2011-12 (<£100). SAM141020 clearly states, under "Exceptional Cases", that the more than double the liability rule that was introduced in April 2012 is in fact a "likely exceptional case" in which the operator might overrule the SA computer's "rough calculation" that has automatically prevented the transfer to PAYE. SAM141020 is in plain enough English: the rule my caller is relying upon is not a reason to disallow a coding out but, quite the reverse, an exception; it's a specific example of when to use FUNCTION TRANSFER TO COP to override the computer. 

I'm further informed that the computer will physically not allow £980 to be collected unless a minimum of £980 of tax is due to be paid in 2013-14. That has to be plain wrong, but anyone who's ever flown Easyjet will understand the futility of arguing with a certain type.

Finally, and as a final parting shot, I'm told by my caller that she is relying on Income Tax & PAYE Regs 2003 SI2003/2682 Reg 14.1 sub-section g "Matters relevant to the determination of a code" which, although adding a subjective element, certainly would not prevent £980 of tax from being collected via PAYE from a £8k - £10k anticipated p/t salary. I think it a bluff, in the hope I will give up and go away.

Looks like it'll have to be a complaint letter to Liverpool. 

If these Revenue people worked in the real world their employer would be vicariously liable for their negligent misinformation and its financial damages. I long for the day when agents will be able to claim costs for the many hours wasted being given the runaround by HMRC's retarded staff. Working together, my elbow!



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16th Jan 2013 17:56

PAYE12071 is the problem, not the staff

I don't think that the restrictions that HMRC have referred to are misinterpretations of SAM141020 but are, unfortunately for your client, restrictions programmed into NPS.  They are all listed in PAYE12071. (See further down.)

The bit in SAM141020 about "When brought to your attention, if you decide that the whole of the balancing payment can be collected through PAYE" is, as I understand it, intended to cover the situation where the "rough calculation" done by SA failed because the figures used were too low but were only historical.  Where the estimated income for the coming year will be higher, and would have resulted in a different outcome, then the operative will be able to look at doing the transfer after all.  Unfortunately you have told them that the income will be of roughly the same amount as previously and this is why I think that they still genuinely can't do it (and why Marion suggested giving them an estimated income figure of £18,000.00 as a means of getting round the restriction).  

The relevant bit of PAYE12071 that is the stumbling block is "When reviewing the tax due for the year do not more than double the individual’s liability by including collection of an underpayment."  As your client's income is below the PA, you're stuffed.

(The other main restriction of limiting the tax to 50% of the gross pay has been around for donkeys' years and is not the problem here.)

Because this issue always comes up at this time of year since NPS came is, I have trawled through the PAYE manual many times in the past and did so again today and I think that you are going to be out of luck in splitting the PA between their Self Employment income and their PAYE income.  

PAYE13115 does allow the taxpayer to allocate their allowances over more than one "source" but the source has to be a PAYE one.  I have never found any reference in the manual to be being able to allocate any allowances to a non PAYE source such as you are suggesting.

Sadly, NPS has proved to be more inflexible than its predecessor in allowing HMRC's staff to use their discretion.  And so (at long last) in answer to your original question - I don't think that the HMRC staff are messing you around.  Their hands are tied by the way NPS has been programmed.  I don't know if Marion's suggestion of putting an inflated estimated income figure of £18,000 would be accepted now as you have repeatedly told them the income is £8/9K.

You mentioned that you have been speaking to the Business Payment Support Helpline.  In addition to their number (0845 302 1435) the Tax Faculty website also gives a telephone number for SA arrears - 0845 302 1427.  I know that, strictly speaking, your client isn't in arrears but it sounds like they soon will be and if anything can be put in place it needs to be done before the due date or surcharge will apply.  If nothing else, you might get to speak to someone different to the man you have been speaking to so far.

I hope that something somewhere in this rather long post is of some help.

Kind regards


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