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BREXIT to change 18/19 SA tax calculation ?

Missing payments on account "fix" by HMRC causes change in 18/19 tax calculation

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Last week HMRC provided an update on how they are going to handle the missing 2018/19 payments on account.  The problem being that some 2017/18 tax returns have been incorrectly processed resulting in the two 2018/19 payments on account not being created in the taxpayer's HMRC account and therefore being omitted from Statements of Account issued to the taxpayer.

Through its Agent Forum HMRC advised that [and I summarise] only if the first payment on account had been received by HMRC by 31 Jan 2019 would the two missing payments on account be created. Otherwise, the missing payments on account would be wrapped up into the 2018/19 balancing payment leading to a single payment due on 31 Jan 2020. From snippets here and there on AccountingWeb we learn that HMRC has had to divert staff from SA tasks to work on Brexit, creating all the missing payments on account must be one of those SA tasks.

The 2018/19 SA tax calculation (and tax return software) will need to be adjusted to allow for a new category of taxpayers whose 2018/19 payments on account will be merged with their 2018/19 balancing payment.  The software will require a user-option to merge the two payments on account into an extra-large balancing payment.

There is also the issue that HMRC is over-riding the law as to when tax is payable (some taxpayers will not have to pay any 2018/19 tax until Jan 2020).  Was this a suitable way to advise taxpayers and agents of something so significant ?


Replies (6)

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By atleastisoundknowledgable...
20th Mar 2019 07:33

I don’t think that the software will need a third POA option. The PoA were either paid (and not refunded) or weren’t. There is either the full amount or just the balancing figure due in Jan 20.

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Replying to atleastisoundknowledgable...:
By SteveHa
20th Mar 2019 08:14

Except every single 2018/19 Return is going to have to be checked against 2017/18 POAs and the POAs changed in software to ensure that tax comps are accurate, increasing processing time which, across all taxpayers, is likely to represent a significant cost to the profession fixing yet another HMRC [***] up.

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Replying to SteveHa:
By Wanderer
20th Mar 2019 09:18

I'm with ALISK on this and regard it as a non issue.

I always check the online account and see what's been actually paid and put those payments into the PoAs in the software.

Not sure why people are getting excited about this. It's not a new thing for 17/18 return processing & 18/19 PoAs. I have several clients where the exact same thing occurred for 16/17 return processing and 17/18 PoAs.

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Replying to Wanderer:
By ireallyshouldknowthisbut
20th Mar 2019 09:31

Well quite

We always check if POA are paid. How the heck do you work out what someone owes if you don't know what they have paid so far?

I have already told clients to pay the POA, so if they haven't done so, and relied on HMRC's statements and not queried it with us then its their look out.

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By accountantccole
20th Mar 2019 12:33

Does this mean rubbish tax payers who didn't make their POAs on time, effectively get away with not making payments and no interest implications? Doesn't seem particularly fair

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Replying to accountantccole:
By Wanderer
20th Mar 2019 12:39

accountantccole wrote:

Does this mean rubbish tax payers who didn't make their POAs on time, effectively get away with not making payments and no interest implications?

Yes no interest. Don't agree with the comment that they are 'rubbish tax payers'. I've had several clients who DID make the PoA, and it was promptly refunded. It's HMRC who are rubbish, not the tax payers.
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