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Employers e-filing cash incentives delayed

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10th Aug 2007
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HMRC says that due to the large number of claims for a cheque payment by employers who are entitled to receive the PAYE e-filing incentive, it is taking it longer than anticipated to deal with them.

The 2006-07 tax free payment of £150 is awarded to employers, with less than 50 employees, who filed their Employer’s Annual Return online. If an employer is awarded the tax-free payment, they can apply for a cheque payment instead of off-setting the payment against future year PAYE and NI liabilities.

As a result of the unexplained delays it may take employers until December before they get their cheque.

HMRC say “We are very sorry for the delay. We want to assure you that we do have your claim in hand. We will get back to you. There is no need for you to contact us again.
We cannot make a cheque payment if you have any PAYE returns outstanding. And we will clear any amounts of PAYE outstanding before sending you a cheque payment for any balance remaining.
So to get your tax-free payment in full, you must send any outstanding returns and payments as soon as possible.”

PAYE campaigner Matt Boyle said “In view of the fact that all PAYE End of Year Submissions must be with HMRC by 19th May AND the fact that there is unlikely to be a vast increase on the numbers submitting electronically, as there just are not that many more small employers, it would seem that there is more to this announcement than has been stated.”

Could this outcome be another casualty of HMRC’s efficiency drive?

Breaking news:
Judging by a posting in Any Answers (see 1st comment below) it looks as if "computer problems" are again to blame.
HMRC's press office is blaming high demand for cheques, however there is indications that troubles are centred around the PAYE/NI collection systems.

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Replies (10)

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By User deleted
13th Aug 2007 12:26

Possible reasons for the delay:
According to a report by "Nelson" in Any Answers , there is a "backlog" on the system (more computer failures?) and some electronic submissions have disappeared

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By harryfricker
21st Aug 2007 15:07

e-filing incentives
We have at least 15 clients awaiting confirmation of their £150 incentive entitlement who do not want a cheque. All they want is evidence to reduce their next PAYE payment. It seems that HMR&C have made excuse after excuse but still fail to provide written confirmation when requested to do so.

We also have new businesses still waiting for their VAT registration numbers and these were applied for on-line on the 1st June 2007.

Shame on them.

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By dhollister
15th Aug 2007 13:57

Delays with repayments
It's official. The delay in sending PAYE repayments is due to the fact that 50% of the staff allocated to the job are off sick, and the other one's on Maternity Leave .....................

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By Robert Clubb
15th Aug 2007 17:11

Many A.......................

Many a true word spoken in jest, David!

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By User deleted
15th Aug 2007 17:08

I must be unlucky!
We are waiting for 55%, includng our own. Not sure if we are unlucky or the 10% figure is inaccurate!

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By Peter Tucker
13th Aug 2007 21:19

Glad I'm a Customer !!
HMRC Press Office was emailed as follows:
"In view of the fact that the Submissions have to be lodged by 19th May 2007 and that we have been advised that HMRC Computer systems which deal with the Forms P35, can determine if an Incentive Payment is due, will you please explain exactly why an alleged increase in numbers apparently causes such long delays.
Will you also provide the actual numbers involved this year as well as the numbers involved last year, so that a comparison can be made publicly."

The response was as follows:-

Please find below only publicly comment HMRC are currently making on this issue.
“The majority of small employers ' self serve ' the incentive payment by deducting it from their PAYE payments. Over 50,000 employers have received 2006/07 incentive payments, which is significantly more than at this time last year. Less than 10 percent of the 1.3 million employers who qualify for the incentive are currently waiting for a cheque.
“Despite the current temporary delays, most cheques will still be issued more quickly than they are waiting as a matter of courtesy.”

The phrase - "ONLY PUBICLY COMMENT HMRC ARE CURRENTLY MAKING ON THIS ISSUE" - would seem to indicate both a lack of education and a serious lack of open dialogue?

PS
The fact that "less than 10% of the 1.3 million Employers are waiting for a cheque" would indicate that no more than 130,000 Employers are affected. Good to know that this is just a small scale issue.
Just imagine the situation if HMRC were waiting for 129,999 cheques, each for £150 (That's a total of £19,499,850, in case anyone from HMRC Press Office is reading this article!!)

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By Robert Clubb
13th Aug 2007 12:54

Robust Systems
It appears that HMRC continue to ignore Lord Carter's 'demand' for robust systems to be employed!

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By User deleted
13th Aug 2007 12:55

tax free - what a good idea!
Whose daft idea was it to make this payment tax free?

Yes I know that that makes it worth a bit more but at the same time it makes calculating the Corporation Tax (or Income Tax) more complex and therefore more expensive because there is another addback to identify and adjust.

What is the betting that there are loads of employers whose accountants have not remembered to make the adjustment, with the incentive ending up being taxed.

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Euan's picture
By Euan MacLennan
13th Aug 2007 14:52

Use IRIS, Patrick
... or one of the other accounts preparation linked to business tax packages where individual account numbers can be set up to be added back in the tax computations like entertainment. Do it once and never worry about it again!

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By simagnus
13th Aug 2007 15:14

Incentive delays
I dont mind waiting until Decemebr for this years. I just wish that they would finish paying the 2005-06 and 2004-05 incentive payments.

We are still waiting for 22 out of 200 we filed for year ended 5th April 2005.

Stuart Magnus
Newton Magnus & Co
Broadstone Dorset

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