PAYE underpayment for 2006/07

PAYE underpayment for 2006/07

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The company's PAYE liability in 2005/06 was covered by the incentive payment of £250 leaving about £45 owing to the company. I.e it should have been treated as overpaid PAYE.

For 2006/07 the company took into account the overpayment of PAYE brought forward and deducted from the PAYE due for 2006/07. HMRC are now demanding the extra £45 in PAYE for 2006/07, ignoring the overpaid amount for 2005/06. It is impossible to get through to the Collector of Taxes at Cumbernauld by telehone ( the line is constantly engaged) to discuss the position.

Has anyone else experience this ignoring of the 2005/06 credits?

Rebecca

Rebecca Cave

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By stephenkendrew
31st May 2007 19:28

yes!
On what seems to be a daily basis at the moment, as the 06/07 returns are processed.

I usually write to the Collector.

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Euan's picture
By Euan MacLennan
01st Jun 2007 11:28

Was it your fault?
The Employer Helpbook E10, Finishing the tax year up to 5 April 2007, does make it clear that Box 25 of the P35, NIC's and Tax paid already, should "include any overpayment from the previous year transferred to this account by HMRC". Did you do that?

I too have made the same mistake of treating "NIC's and Tax paid already" too literally on one or two P35s which we have filed with third party software, so I now await the underpayment notices.

We have found a different Revenue mistake in one of the few 2006/07 underpayment notices that we have received. They have failed to register the £250 2005/06 incentive credited to the account in 2006/07 and reported correctly in Box 26 of the P35 (or to be precise, on the "Incentive payment" line in the third party software submission). I do hope that I will not be receiving £250 underpayment notices for the other 40 or so of our clients to whom the same applies.

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