My client ceased his self-employment on 30 September 2022 and started a part-time PAYE employment on 1 October 2022. His only other income is basic State Pension and he has no savings. We applied for 2022/23 payments on account (based on the 2021/22 liability) to be reduced and both reduced installments have been paid.
The revised payments on accounts left a small balance remaining, and by not ticking the relevant box on the 2022/23 tax return, we applied for this balance to be coded out in 2024/25. HMRC is insisting that this can’t be done, that the balance should be treated as payments on account still outstanding.
In a recent query (Self-assessment 2nd interim coded out, 26/06/23), John R pointed out that the legislation supports the opposite view. His posting indicated that the tax to be coded out for my client would be the 2022/23 liability, less "payments on account made by him" rather than "payments on account payable by him". He references Income Tax (PAYE) Regulations 2003 Sec 186 and TMA 1970 Sec 59B(1).
Is HMRC right in disallowing my client’s application to code out the balance of tax in this case?
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No. John R is right. Reg 186 says:
(1) This regulation applies if, on the assumption mentioned in paragraph (2), the difference for a tax year mentioned in section 59B(1) of TMA (difference between tax contained in a self-assessment and aggregate of payments on account) would be payable by the taxpayer. [The "difference" is the balancing payment]
(3) The Inland Revenue *must* have regard to the difference in determining a taxpayer's code for a subsequent tax year under regulation 14 (matters relevant to determination of code) if—
(a) it is less than £3,000, and
(b) the return for the tax year is—
(i) delivered by an approved method of electronic communications before 31st December following the end of the tax year, or
(ii) delivered by any other method before 1st November following the end of the tax year. [Para (b) obviously applies if the return has already been submitted]
There is nothing in the regs to stop the amount being coded out in 2023/24, let alone 2024/25. It is "a subsequent tax year", so the matter is at large.
One possibility in HMRC's mind (or what passes for it) might be that putting the UP in the code would have the result that more than 50% of income would be deducted (see reg 23(5)), but that shouldn't stop an amount up to 50% being coded out and the balance coded out in the following year.
"One possibility in HMRC's mind (or what passes for it) might be that putting the UP in the code would have the result that more than 50% of income would be deducted (see reg 23(5)), but that shouldn't stop an amount up to 50% being coded out and the balance coded out in the following year."
where the tax owing is more than 50% of the tax deducted at source hmrc refuse coding collection in my experience - not convinced this rule is in legislation but you are wasting your time to get hmrc to change their mind if they say thats the reason why it cant be collected and the numbers they have back that up. Note it might be that waiting for payslips to accumulate tax deducted might allow you to ring hmrc later and get then issue sorted.
Unless client is really sruggling to pay i would highly recommmend never getting tax due coded out - there are far to many times where something goes wrong and the time spent trying to unravel is unecssary if the coding wasnt necessary in the first place.
I'm sure you are right. Just another example of law says one thing, HMRC say "computer says no", so HMRC don't follow law.
I suspect the computer has been instructed from the point of view of charging interest, and the deeming provisions in Sch 53 FA 2009 (which expressly apply only for the purposes of calculating interest) have been 'programmed in'.
I won't comment on the level of instruction the staff have received. There are still some good ones there. It must be so disheartening for them.
I would hope and expect that the SA computer system has been programmed to charge interest properly in accordance with s 109 and Sch 53 FA 2009, but what is the connection between this and the question asked about coding out a balancing payment?
There has been a recent thread about a case where the second POA was automatically coded out so this definitely can happen.
Maybe the problem here is more about the affordability (in HMRC's eyes) of the amount owed on Self Assessment being collectable via the 2024-25 tax code.
As the client only started PAYE employment in October 2022 it's entirely possible their expected earnings (on HMRC's systems) seem lower than you/the client can reasonably expect them to be. Or maybe the part time earnings are accurate (on HMRC's systems) and they are simply too low for HMRC to code out the amount owed?
I have had two such cases this year and it is most annoying. I would not expect to put in an X in the box saying "Do not collect". I have it set as default unless clients specifically ask for it be taken out. PTP wouldn't put the X in as the overall liability pre POAs was over £3,000. The problem is I didn't spot it as I didn't expect to see it. It was only when HMRC sent an SA302 showing underpaid tax in an earlier year. They have perpetuated it for 2024/25. This is precisely the kind of case you need to ring up HMRC as it can't be sorted out digitally. My client is not happy as he likes to pay whenever anything is due.
You need to look at the screen in online services called Information to complete your tax return. This is part of our SA checklist.
Thanks. I normally look at the code to pick up the state pension. What I think happened was I thought it was an "in an year adjustment" but I will check that in future. Thanks for the tip.
The thing is, your small balance is probably going to be part of your re-revised POAs, because you've overdone the reduction of your POAs.
Yes, Lionofludesch, that's precisely how it's presented on the client's account. And yes, we over-postponed. But this doesn't preclude the defence provided by Income Tax (PAYE) Regulations 2003 Sec 186 and TMA 1970 Sec 59B(1), does it?
It's an interesting debate. But I'm not sure I'd put a lot of effort into arguing it. How much will you charge your client for postponing - if you win your argument - a small balance of tax which everyone seems to agree that the client owes?
Spend your time wisely.
Personally I think to use "quanta" is rather precious, comparable to a friend of mine who, when at the opera and two female singers take a curtain call, calls out "brave!". And like the person in the arcane world of tax and life assurance who insisted on referring to insurance "premia".
Don't their aircraft have to take-off upside-down (in order to be the right way up when they arrive down-under)?
Anyway I don't think they like the 'u' ... describing themselves as Astralyan.
My thoughts are that life's too short (except in this environment of course) to spend time caring that, technically, spaghetto is the singular of spaghetti ... not only, as Richard put it further up this chain, for being precious - but also entirely pointless (as I can't imagine a conversation in which I need to make clear that my point of reference is only one of the strands of spaghetti under discussion)!
My simple rule of thumb (at least for the spoken word) is to accept almost any variation - so long as the sense is intelligible - but to slap down any attempt by anyone to correct others.
For example ... Montreal - is it Mon-tree-all or Moh-Ray-arl ... my attempts at phonetic spelling for English or French pronunciation?
When I lived in Ottawa I accepted either, but got vociferous when any patronising idiot drew attention to the 'correct' way of saying it (as if they knew better).
My imagination has moved on. I'm now imagining you might not get a job in the BBC pronunciation unit - any more than I will get a job painting aircraft.
Because they see it as their job - and indeed it probably is their job - to tell people how to say things. And I expect to decide which pluralisations the BBC will use - eg data or datums.
I didn't mean to impugn Hugo's pronunciation, which is doubtless more informed than mine. (It occurred to me on the way in that maybe it might read as if I had.)
[I don't need to explain the painting part of my comment, do I?]
And I expect to decide which pluralisations the BBC will use - eg data or datums.
Data is widely regarded as a singular. As is criteria.
Whereas the government are plural. As are the Revenue (as some folk - or is that folks? - here call them).
There's widely regarded. Then there're the BBC - which are what I was talking about.
Whereas the government are plural. As are the Revenue (as some folk - or is that folks? - here call them).
There's widely regarded. Then there're the BBC - which are what I was talking about.
Well, I was taught that similar bodies were singular when acting in unison - nem con - and plural when disagreeing ...
"Whereas the government are plural."
Er, no it is isn't ... it is a single entity (that happens to be composed of multiple elements, including individual people).
And the same goes for nation, religion, parliament and other groups - including the BBC.
It is of course possible to have multiples of all of those (except the BBC for copyright reasons) ... hence plurals exist (usually with a simple 's' appended).
So ... 'the BBC said that, after reviewing many governments globally, whilst the parliaments of most nations allow the practice of multiple religions, they are forbidden to create their own BBC'.
Where it gets tricky is when the speaker gets confused between, say, HMRC (the body) and HMRC (the individuals within it).
So, the body publishing a Notice is 'it'; whereas the people who arranged for its publication are 'they'.
Not really that complicated but we all (very much including the BBC) get careless from time to time. :=)
Hugo you appear to have read my comment out of context. (And for once the format of these threads did not obscure the context, so you don't have that excuse.)
Context is [nearly] everything; have I not taught you that yet?
Ah, I thought I had it ... but it slipped from my fingers, Miss.
[I've taken myself off to stand in the corner without awaiting a formal black mark].
You were ascribing the misuse of singular/plural TO what is spouted BY the BBC?
[I'm much better at recognising the sardonic when I can see the speaker].
For example ... Montreal - is it Mon-tree-all or Moh-Ray-arl ... my attempts at phonetic spelling for English or French pronunciation?
When I lived in Ottawa I accepted either, but got vociferous when any patronising idiot drew attention to the 'correct' way of saying it (as if they knew better).
Goddammit Hugo, you've opened the can of worms!!
Peking or Beijing ?
Calcutta or Kol-KAT-a? Or KOL-kat-a?
Bombay or Mumbai?
Catarrh or KAT-uhr?
Moscow or Moskva?
Kiev or Kyiv?
Tomahto or tomayto?
Paris or Paree?
NEWcastle or NuhCASuhl?*
Lerrick or Lerwick?
Lan-DUD-noh or Llan-DID-no?
Slath-wit or Sla-wit?
Rome or Roma?
Iran or Eye-ran?
CASuhlfuhd or CAHsuhlford?
Ronder or RHON-tha?
Derry or Londonderry? Or Stroke City?
*Depends which Newcastle you mean.
Typed up while waiting for HMRC to answer the phone?
No. It would have been a longer list if I'd done that.
Slath-wit or Sla-wit?
If we're on the same track... the number of times I've had to jump in when I hear "Slay-th-wayt"! Don't even get me started on Dodd-uth (Dodworth) or Penny-stun (I'll not even attempt to write the actual name for fear of '[***]')
Even a grumpy northerner knows it's incorrect to say say... "By-chester" or "Tow-chester". Worcester however... we call it Hendo's round here!
For example ... Montreal - is it Mon-tree-all or Moh-Ray-arl ... my attempts at phonetic spelling for English or French pronunciation?
Pronounced Mon-tree-all here.
Yup ... but, as per your previous list, only because the game is NOT being being commented on by a Quebecois (Montreal being in Quebec which recognises their variant of French as the dominant language of the province - used in everyday communication in education, the media, and government).
However, whichever pronunciation is used, everyone there knows what you mean - which is why I dislike anyone 'correcting' either one of them.
BTW I enjoyed the game ... thanks!
BTW I enjoyed the game ... thanks!
Better than NFL for a number of reasons. I particularly like the point you get for missing a kick.
If you're interested, highlights of all the games are on YouTube.
What are your thoughts ........ and hundreds and thousands?
I've often wondered what you would call just one.
lionofludesch wrote:
What are your thoughts ........ and hundreds and thousands?
I've often wondered what you would call just one.
I believe it's a sprinkle.
Which makes a very irregular plural.
