And I thought HMRC couldn't get any worse

And I thought HMRC couldn't get any worse

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Client received a form from HMRC advising them of an overpayment on their PAYE account giving the options of it being carried forward to current/future year or to request a refund. We requested a refund as client is one man co under threshold, so no current or future PAYE/NIC liability expected. Then received from HMRC a letter asking client to explain exactly how the overpayment arose and saying that they won't repay without full details and saying that they needed exact details of dates and amounts of payments and why they were wrongly made.

Anyway, we wrote back giving background to the case, which was that all tax payments (personal,ct,vat and paye) were messed up a couple of years ago as client didn't realise that HMRC had different bank accounts and sent all payments to the same account with the same HMRC reference. Not only that, he ended up double/treble paying as he got demands for monies he thought he'd already paid so he paid again (again to the wrong account). The end result was lots of internal transfers by the Collector between the various references/taxes to get the monies where they belonged, which triggered various repayments back to him, all of which came back fine except for the PAYE. I expected that telling them this would let them tick their boxes to release the PAYE underpayment.

But no. They wrote back asking for exactly what payments were made, what transfers were made, etc., and expecting us to reconcile it to the balance shown on their account as the overpayment. We've spent hours trying to achieve this and just can't manage it - the difference is suspiciously close to £75, and I think that's the last year of the online filing incentive which we can't find as being repaid. The difference then becomes just a couple of pounds. I've written back to HMRC with this breakdown, but now just had another letter back from them denying the refund unless we can show a reconciliation to the penny.

Surely they can't ask for this? They've admitted that there's an overpayment so they should pay it. I've spent hours on this. I've written to them confirming he's the only worker, confirmed the P35s were submitted correctly, sent in copies of the P11 tax/nic calculation sheets for each year showing no tax/nic due, confirmed no class 1a from the P11ds, etc. They are being completely unreasonable in expecting me to prove a figure that they've come up with and they refuse to give me a breakdown of their figure.

I'm about to make a formal complaint about this - does anyone have any alternative ideas as to how to get this resolved. The total of the underpayment isn't huge - just a few hundred pounds.

I wonder if this is a new incarnation of the old CIS problem where they want bank statements and supporting paperwork even where CIS returns have been made before they make repayment, and even then, take months/years to do it.

Apart from this particular client and my proposed complaint in that isolated case, perhaps this underlies some change in direction within HMRC to deliberately put barriers in the way of making repayments - is it time for the accountancy/tax professions to take some action to get this type of thing stopped?

Replies (7)

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By Xcast
03rd Jul 2013 08:33

Don't waste any more time doing their work

A similar thing happened to me and in the end I wrote a formal letter of complaint to the Deputy Director asking for the statutory authority preventing them from providing a complete breakdown of the payments which they have on the account.

A few days later I received a phone call from the Revenue and then a fax of the payments made by the client so that I could then reconcile the figures and point out THEIR mistakes, which is far quicker than sending them the details.

The client soon received his refund and I received a letter of apology from the Revenue.

I am getting fed up with doing the Revenue's work for no return and you are right that it is time that the Profession makes a stand against this sort of behaviour.

 

 

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Chris M
By mr. mischief
03rd Jul 2013 08:59

My approach

I have found the following approach to work wonders:

 

The form-filling approach taken by people like you leaves a sour taste in my mouth.  Should you in any way pursue forms further, or make further threats in connection with this matter, I will:

Raise a formal Complaint Case.Write to the Office of Tax Simplification showing how HMRC continue to go the long way around where possible.Write to Lin Homer to demonstrate that further cost savings are possible.Write to George Osborne in a similar vein.

I always write to a named individual.  When speaking to them on the phone I make it clear that I hold them personally accountable and not the system, and that any compliants or letters to higher authority will include their name.

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By User deleted
03rd Jul 2013 09:33

Two sides

With apprent overpayments of PAYE it is standard practice to ask for an explanation, and I do not disagree with the practice. Tax returns are different, because they quantify the tax payable and any under or overpayment can easlily be identified. With PAYE, however, the P35 is simply a note of PAYE/NI due, with no means of verifying the figures on it. If there is a discepancy, I believe that HMRC are quite entitled to ask for a reconciliation, in order to confirm that the return figures are indeed correct.

Having said that, I agree that the OP has done more than enough to satisfy HMRC as to the reason for the overpayment and a letter of complaint would be quite appropriate.

I assume that RTI should reduce the number of such instances

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Replying to andy.partridge:
Euan's picture
By Euan MacLennan
03rd Jul 2013 10:27

You're an optimist!

BKD wrote:

I assume that RTI should reduce the number of such instances

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By User deleted
03rd Jul 2013 10:37

Ever the optimist

Which is why I said "should" and not"will" :)

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By pembo
03rd Jul 2013 11:21

had a couple of these over the last year

and adopting the principles referred above wrote a load of incomprehensible management speak garbage on the form basically saying "because the client overpaid" . The clients got the refund no problem.

What we all must appreciate is that these are troubled times and Gideon sorry Jeffrey sorry George O needs the dosh. Wouldn't hold your breath with Lin Homer Mr Mischief....various comments attributed to her illustrious career:

"described by the Commissioner as one that "would disgrace a banana republic"  (     

"catastrophic leadership failure"  

"more like the scene of a Whitehall farce than a government agency operating in the 21st century".

This gal has the hide of a rhino. Just the person to take over from Dave as he advises banana republics around the world how to set up robust tax systems...

 

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Should Be Working ... not playing with the car
By should_be_working
08th Jul 2013 10:12

I have yet another one of these to deal with at the moment, In my client's case it's a typical story of client making amendments to the payroll after it's been run and often having paid the original sum due. Haven't had the sort of jobsworthiness that the OP's experienced ... yet.

Then there's the SA refunds; we're hardly one of those production line CIS refund factories, yet there seem to be more 'security checks' this and last year ... or is it just us?

It's down to HMRC, but when a client is desperate for his refund and we're the messengers delivering the bad news, blaming HMRC can start to sound like a tired excuse.

The amount of time taken to hold these things up (even just on HMRC's side) must wipe out any cashflow advantage (at whatever miserly rates gilts are issued at right now)?

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