VAT and PAYE statements from HMRC

VAT and PAYE statements from HMRC

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For Self Assessment and Corporation Tax one can cross check a payment made via the HMRC online system, but this is not possible for VAT and PAYE. Reconciling queries is therefore that much more difficult.

I have been involved in a long running spat with Debt Management over a client's VAT, where I suspect they may have mis-posted a payment and where I am unsure how the demand is made (interest, penalties etc going into the mix). It seemed entirely reasonable to request a ledger summary of their account that I could cross check but I keep getting the following;

"You have requested details of historical information relating to amounts of VAT previously declared and payments your client have made. The law says that anyone who registers for Value Added Tax (VAT) must keep a record of their VAT details for six years. If you do not keep the correct records for the correct length of time then you may be charged a penalty. The information that you have asked for should be found in the records that you are required to keep. To retrieve the information from our records takes time and is costly. Please refer to your own VAT account and ring us on the above number only if you need to check anything further with us"

In fear of the consequences the client has paid the demand. I now see that HMRC has a policy against their staff going through PAYE payment histories over the telephone, so I have requested one in writing and have my fingers crossed.

This sort of official finger-wagging is all very well, but no help when one is genuinely trying to resolve a problem to the benefit of both sides. There would be no problem with their staff time if they were just to post the data online for us (and now that the regional PAYE computers have been unified one would have thought that online payment information would have been a benefit). It is not as if the data is not already residing on the HMRC computers that the staff can see on their screens.

How is this "Working Together" and can any one suggest a way to get over it?

Replies (11)

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By DMGbus
26th Sep 2011 13:27

HMRC responsibility

Your client can NOT be expected to responsible for computing and recording interest and penalties.   The responsibility for this lies with  HMRC.

At the very least HMRC should provide this data.

Furthermore is it a foregone conclusion that all payments paid to HMRC have been credited to the client's account?

I thought that HMRC would be more amenable to justifying the debt once the debt gets to Debt Management - at the end of the day best for HMRC to justify the debt out of court rather than  have to justify it in court I would have thought.

 

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By Alan Ferris
26th Sep 2011 14:39

Subject Access Request

Your client can make a request under the data protection act for any information held about him on any HMRC database.  They cannot refuse such a request.  Also I beleive that they do not currently charge for DPA requests.

 

 

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David Ross
By davidross
26th Sep 2011 22:45

Thanks - very helpful responses

There have been several exchanges of letters, with me getting ruder each time.

 

I think I can work your ideas into another letter - any others suggestions, people? We should not have to be creative about this, I believe HMRC's approach is just obstructive and wrong.

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By richardterhorst
29th Sep 2011 13:42

HMRC playing silly b**gers again.

It is irrelevant if the client keeps records. As accountants we know you get a copy of the other side (e.g. bank statement) and tick of until fully reconciled. That is prudent and proper.

I submit any Court would find that reasonable.

I would in that case write to advise that their obstructive attitude does not give the client and you the oppertunity to do a proper reconciliation and that you look forward to a judge finding in your favour and that accordingly you have advised your client not to pay until a proper reconciliation can be done.

With tongue in cheek you can add records are in the archives and too costly to extract and that getting the accountant to check entries is costly and the client accordingly will not instruct.

You would have thought they wanted it cleared quickly.

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By Robjoy
29th Sep 2011 14:34

Been there . . .

I'm not an accountant, but I had a similar experience as a bookkeeper for a company a few years ago.

They were paying arrears of both VAT & PAYE at a flat amount per month. The debt collection office posted the payments (usually they didn't bank it until at leat a fortnight after it was sent) according to their whim - we had no idea whether they'd decide it was VAT or PAYE or some of each. I asked for a statement of the balances owing so I could get the year end accounts right. You'd think I'd asked for it to be carved in marble. They didn't seem to think there was anything strange about saying "We can't do that". I think we eventually got one several months later, but it didn't come close to matching up what we'd paid - I gave up!

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
30th Sep 2011 12:04

Good advice from Alan Ferris

...echoed this week by Jennifer Adams in her latest article, Use subject action requests to get info from HMRC.

@davidross - Do let us know if you make any headway, or if you have to resort to a SAR.

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David Ross
By davidross
30th Sep 2011 18:31

I think there is a deliberate policy of obstruction

I wrote in a request for details of PAYE payments recorded, on 21 September and today received a reply dated 27 September - WHY SO FAST? - suspicious in itself.

Here is what it says;

 

Dear sir or madam

PAYE Income Tax and National Insurance

Tax years 2009110 and 2010111

Amount you have overpaid: £0.00 and £1182.72

I acknowledge receipt of your request for payment schedules for the above years.

We expect you to keep information about amounts due and payments made as part of your records. Please write to me, at the address shown above, with the following information by 10 October 2011 so that I can review your records.

• The total amount of tax you are due to pay to HMRC for the years in question.

• A list of payments made for the years including

- references used

- the period(s) the payment(s) relate(s) to (month, quarter number and so on)

- dates of payment.

• The method of payment including, where appropriate, the cheque number(s).

• An explanation of how the overpayment arose.

• Instructions for how you would like us to deal with the amount that you have overpaid.

If I do not receive this information by 10 October 2011 I win assume that you no longer need a review and will consider the matter closed.

So instead of being sensible and providing me with a printout, they have sent a threatening and dismissive reply, asking me all sorts of unnecessary detail (they know how much the employer owes, for instance, from the P35s)

Am I to presume that if I don't jump through their hoops, they will hang on to over £1200 of my clients' money?

Someone at HMRC has made an arrogant policy that taxpayers only have themselves to blame, sod them if they don't have perfect records. But the World is just not like that.

 

And this arrived on the same day as a shoal of £400 penalty demands for clients with Nil 2011 P35s (for which I have email acknowledgments)

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By Robjoy
01st Oct 2011 13:14

Who isn't keeping accurate records?

This repeated response from hmrc, like davidross: "We expect you to keep information about amounts due and payments made " is the bit that really annoys me. It was said to me, and my response was, phrased a little more obscurely, "I have, but I expect you to do the same, and our records don't appear to agree, so I'm trying to find out why. I've reconciled everything in sight, have you?" They want to review our records, but don't want us to review their's - oh, I forgot, they never make mistakes, so the only possible explanation is that I was wrong.

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Euan's picture
By Euan MacLennan
01st Oct 2011 21:24

Accurate records? You must be joking!

We have suffered a PAYE inspection on a client which is an international haulage company employing lots of Polish drivers.  Some of them have come to the UK, have applied for NI numbers and we deduct NIC on the payroll.  The others give addresses in Poland, do not have UK NI numbers and we do not deduct NIC.  We have submitted forms P46 in every case.

The Revenue is apparently conducting an exercise on PAYE returns where no NI number is quoted.  The Revenue's opening gambit was to threaten to claim that tax should have been deducted at code BR (rather than 747L M1) on the presumption that forms P46 had not been submitted.  They had obviously undertaken no checks of their records to establish whether forms P46 had been received.  When they came to visit us, they checked our records to see if we had submitted forms P46.

I suspect that they are incapable of establishing from their records whether forms P46 have been received, which makes you wonder why we all bother sending them the information.

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By Johnandrew
05th Oct 2011 08:54

It doesn't get any better ..

Unfortunately, reasonable requests for statements of account from HMRC are routinely ignored: having proved to HMRC Enforcement Office (who were threatening to petition for winding up) that their demands were overstated a request for a statement of account for all taxes has been ignored several times.  My client keeps good records but has no influence over how HMRC choose to allocate or reallocate payments and this 'side' of the picture is essential for taxpayers and their advisors to check whether demands are correct.  Unfortunately the significance of this point would appear to have escaped HMRC altogether.

A major part of what HMRC are tasked to do is surely to collect tax which by implication means that the accurate allocation and recording of payments is imperative.  If they have that information why then can they not simply run off a statement showing payments due, recieved and allocated within a period without resorting to requests for additional information?

HMRC = shambles! 

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Replying to thomas.peterson:
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By Robjoy
05th Oct 2011 09:21

Treat us like a customer with a credit account?

How about this for a suggestion to make you laugh: If you have a customer for whom you perform different services and sell different goods from time to time, you post each sales invoice to their account, send monthly statements and agree payment terms. So why couldn't a company have an HMRC account to which the usual PAYE/NI, Class 1 NI, corporation tax, S419 tax, VAT and whatever else, are posted? Then there could be payment rules, say a minimum monthly payment of that month's monthly stuff (mostly PAYE/NI), plus a third of the quarterly stuff (usually VAT) plus a tenth of the annual stuff, plus any arrears calculated on the same basis. As a quid pro quo the VAT could be posted as the end date of the quarter, rather than a month later, the corporation tax say 6 months after the year end - so everyone would get a bit of time to pay, highly benefitial in the current climate, we'd all know where we were, and HMRC could save billions in admin.

The tragedy is that you'll all probably say 'It could never happen'. But WHY NOT?

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