Can a £3,000 SA underpayment for 2010/11 be coded out in 2012/13?

Can a £3,000 SA underpayment for 2010/11 be...

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I asked in a previous post here www.accountingweb.co.uk/anyanswers/when-will-new-coding-out-limit-apply/... whether a £3,000 SA underpayment for 2010/11 can be coded out in 2012/13. See that post for details.

Surely this is a common scenario and somebody should know the answer or at least point me in the right direction?

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By mattgriffiths
15th Jul 2011 11:45

Coding limit

Is £2,000 for 2010/11. See page TR5 of the return.

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By John R
15th Jul 2011 12:08

Legislation restrospective?

Thanks Matt but the tax return guidance was printed before the new legislation. Please see my detailed points in my earlier post.

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By Steve Holloway
15th Jul 2011 12:46

I don't think so.

I read the passage below as the increase is implemented for 2011/12 returns and liabilities resulting from them.

 

 

The new regulations will permit older self assessment debts and tax credit 

overpayments to be coded out from April 2012.  The limit will be increased from this date for self assessment generally, so those filing returns for tax year 2011/12 will be able to have an underpayment less than £3,000 collected via their tax code, provided they are in employment or in receipt of a UK-based pension.    

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By Shirley Martin
17th Jul 2011 19:02

Two different sets of timings

There are two different situations, with two different timings.

The PAYE regulations have been amended (see here - http://www.legislation.gov.uk/uksi/2011/1584/contents/made) but the Self Assessment ones haven't been yet (Self Assessment: the legal framework, http://www.hmrc.gov.uk/manuals/salfmanual/SALF204.htm).

For non SA cases, underpayments for 2010/11 of up to £3,000 can be collected in the 2012/13 code.  This is confirmed on the Tax Faulty website here http://www.ion.icaew.com/TaxFaculty/22473.

For SA cases, the first year that the £3,000 increase applies is for 2011/12 returns, per the link in your previous post (http://www.hmrc.gov.uk/thelibrary/collect-debts-paye.pdf) which Steve has reproduced above.

So the answer to your question is no.  A £3,000 SA underpayment for 2010/11 cannot be coded out in 2012/13.

Kind regards

Shirley

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