Is it just me, or does HMRC intentionally allocate PAYE payments to the wrong year and then illegally refuse to refund them?

Is it just me, or does HMRC intentionally...

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Is it just me, or does HMRC intentionally allocate PAYE payments to the wrong year and then claim

(i) an undepayment in one year, which the client must pay, and

(ii) an overpayment in the other year, which they, illegaly, will not return unless you explain *to their satisfaction* why they have allocated too much to that year?

It seems like a cheap trick to double up on a month's payment each year.

Replies (14)

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By taxhound
20th Oct 2013 18:56

yes

I had a letter regarding an "overpayment" for one client in 2009/10 - before I was acting.  I got the relevant info from previous accountant.  They wrote me three letters telling me I had not adequately explained the overpayment so would not refund it.   I kept telling them this was the first payment for 2010/11 and not an overpayment in 2009/10.  Finally they agreed it was - and that they had previously asked the client to pay the "underpayment" for 2010/11, which he had.  So finally the money is coming back. 

Ridiculous.

Thanks (1)
Locutus of Borg
By Locutus
20th Oct 2013 20:44

I'd like to see a test case go before the Courts

In my mind, if a tax liability of X is reported to HMRC, but Y gets paid by mistake then the difference should be refunded immediately, unless there are other unpaid taxes.

I don't know what part of the various Taxes Acts gives HMRC the right to indefinitely hold on to a repayment, until such time as an explanation is given that is solely acceptable to them.

Sometimes people just make silly mistakes and pay the wrong amount.  It just happens.

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Chris M
By mr. mischief
20th Oct 2013 20:54

me too!

I've had a few of these too.  Luckily the clients concerned have been savvy enough to know how rubbish HMRC are - old hands at the game.  With new clients it can undermine their confidence in you until they realise just how poor the UK tax service is.

On a more fundamental level, this sort of stupid pratting around is:

1.  Why the confidence of accountants in HMRC is at such a low level.

2.  Why I believe HMRC is grossly OVERstaffed.  They always have lots of staff to prat around on this sort of silly stuff.  Unless we get to a stage where a whole month goes by without one of these prat around situations, I refuse to believe they have too few staff.  They just have too many prats and not enough decent folk.

 

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By chatman
20th Oct 2013 22:27

Bastards

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By Mouse007
20th Oct 2013 23:34

I have just intercepted a transmission...

 

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By Penfold
20th Oct 2013 23:17

Good grief HMRC, what has happened to the rule of law? Is this true, you've just not bothered to catch the real criminals? Have you really just made up the deficit by snatching the shortfall from other UK companies?

Does justice no longer need to prevail? Are you really in cahoots with the Judges so the companies you have accused cannot get any justice?

Blofeld cannot be allowed to get away with this. Why are you letting him? Maybe I need to reach out to 007?

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By catlady
21st Oct 2013 08:17

Could it be because of Money Laundering fears?

 

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Replying to Georgie Goldfish:
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By chatman
21st Oct 2013 08:48

Money Laundering is the new "data protection" excuse.

catlady wrote:
Could it be because of Money Laundering fears?

What could it have to do with money laundering?

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Replying to Georgie Goldfish:
Locutus of Borg
By Locutus
21st Oct 2013 10:07

HMRC is inconsistent, if it is due to money laundering fears

catlady wrote:

Could it be because of Money Laundering fears?

 

I had a case just last week where a client mistakenly used the wrong end part of CT reference to pay £25k CT online, resulting in the whole £25k being allocated to a wrong year that had been settled years ago.

Before I had a chance to call HMRC and tell them to reallocate the £25k paid against the most recent year (which showed a £25k liability), the repayment cheque came through from HMRC.

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By Wieslaw
21st Oct 2013 09:21

HMRC overpayments

Why then are HMRC currently advising clients of 2009-10 over payments NOW.

Does it really take them this long, or is it because clients generally hold payroll data for 3 previous years plus the current year?

As the HMRC website specifies at http://www.hmrc.gov.uk/payerti/payroll/record-keeping.htm

How long you need to keep records for: You must keep your records for the current and previous three tax years.

Ooops if we write to you now about 2009-10 maybe you have already binned the files, so you can no longer prove why and we can KEEP your money!

2009-10, 10-11, 11-12. 12-13 & current 13-14

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Me!
By nigelburge
21st Oct 2013 10:12

If "He Who Is Not To Be Named" was still here...........

............. he would be down the local County Court before you could say knife.

I must say that if this happened to one of my clients, I would be sorely tempted to do the same.

If proof of payment in error could be provided to the Court, I do not think that any judge would not issue an order for repayment asap.

Mind you, HMRC would probably repay as soon as they received the Court Summons.

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Locutus of Borg
By Locutus
21st Oct 2013 10:22

Using HMRC's logic

If HMRC were to mistakenly send a refund to a taxpayer, then the taxpayer wouldn't have to repay it until such time as that taxpayer is satisfied at HMRC's explanation for the error.

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Replying to lionofludesch:
Me!
By nigelburge
21st Oct 2013 10:30

I like it!

Locutus wrote:

If HMRC were to mistakenly send a refund to a taxpayer, then the taxpayer wouldn't have to repay it until such time as that taxpayer is satisfied at HMRC's explanation for the error.

Imagine telling HMRC a number of times that you are not satisfied with their explanation. Hehehe.

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Universe
By SteveOH
21st Oct 2013 12:27

I must be one of the lucky ones

A fairly new limited company client recently sent me a copy of a demand for unpaid Paye for 2012/2013 amounting to about £4,500. My client thought that the figure should have been about £1,000.

Upon phoning the Paye office, the guy there got my client's account on screen and after a few ums and ahs said "Hold on, there is an overpayment in 2009/2010 of about £3,000". He then spent the next 20 minutes or so going through all the overpayments and transferring them to 2012/2013. What my client had been doing was using the same reference number on his online banking transfers; thereby allocating almost all his subsequent payments of Paye to 2009/2010.

So 20 minutes later it was all sorted. Fantastic service. As an aside, during the initial agent verification questions, he told me that I didn't have the 64-8 authority in place. I assured him that I had filed it online and so he looked further and said "Oh yes, I can see you have authority to act for CT purposes so it will be ok to talk to you".

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