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HMRC Failed To Collect 18/19 Interims. Why?

Does Client Just Have To Put Up With This HMRC Failure. Cannot See What Else To Do About It

Didn't find your answer?

Just looking at client's new November 2019 Self Assessment Statement of account.

He could not understand why HMRC want more tax on 31 January 2020 than I advised.

But just noticed what HMRC have done.

Client correctly paid 31 January 2019 first instalment of tax.

But then in January and July 2019 HMRC credited SA account with identical amounts to the 2018/19 interim instalments, and then failed to issue a demand for the second 2018/19 instalment due 31 July 2019.

The HMRC statement now shows that the 2018/19 interims will be payable 31 January 2020 along with the 2018/19 balancing payment. HMRC have acheived this by adjusting the SASOA bringing the two 2018/19 interims back into charge.

Client will not be out of pocket, but he thought he was bang up to date,

Does he just have to pay up now by 31 January 2020, grin and bear it. Cannot see what else he can do. I do not want to waste valuable time complaining to HMRC for no reward to me or client.

Replies (11)

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By ireallyshouldknowthisbut
02nd Dec 2019 17:59

Its a long standing issue for pretty much all new POA for 18/19.

They made a statement saying no penalties will arise for late payment of the POA they didn't ask for. Which is good of them 'n all.

No action for you, apart from finding out who reads your letters and who doesn't.

Thanks (1)
Replying to ireallyshouldknowthisbut:
By SteLacca
03rd Dec 2019 08:46

ireallyshouldknowthisbut wrote:

They made a statement saying no penalties will arise for late payment of the POA they didn't ask for. Which is good of them 'n all.

Very magnanimous of them given that late payment of POAs does not attract penalties (until such time as the balancing payment would, which HMRC have specifically excluded from their statement)

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Replying to SteLacca:
By ireallyshouldknowthisbut
03rd Dec 2019 12:05

Ah, fair point, it was the INTEREST not the penalties, they said they would not charge. my sloppy drafting.

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By lionofludesch
02nd Dec 2019 18:39

Known and much publicised error on HMRC's part.

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By petersaxton
03rd Dec 2019 02:26

"But then in January and July 2019 HMRC credited SA account with identical amounts to the 2018/19 interim instalments"

Credited? Do you mean debited?

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Replying to petersaxton:
By penelope pitstop
03rd Dec 2019 18:12

Depends which debit/credit convention you use.

I was referring to "man on the street" credit, not accounting credit.

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By atleastisoundknowledgable...
03rd Dec 2019 08:17

Sorry, I must be missing something.

Forget the HMRC BS, are you essentially saying that your client paid PoA#1, didn’t pay PoA#2, now is upset that his balancing payment is higher than it would have been if he’d made that second payment?

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Replying to atleastisoundknowledgable...:
By SXGuy
03rd Dec 2019 08:34

That's how I read it!

Seems he didn't pay July as hmrc removed POAs incorrectly. Then re instated them but as client didn't pay July the following Jan is higher. Which you would expect.

I guess the moral of the story is clients need to pay what we tell them not what hmrc does.

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Replying to SXGuy:
Hallerud at Easter
03rd Dec 2019 12:16

That presupposes the client has a filing system and a diary operation re noting in advance what you have told him/her to do/pay, you are getting into the realms of dream clients here (though I did have one family partnership where one of the family took responsibility for ensuring everyone's tax was paid timeously, but this is the exception re clients and admin)

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Replying to SXGuy:
By penelope pitstop
04th Dec 2019 12:48

Client is absolutely first class. Through the door each year on or around 4 April! Yes, 4 April with all of his tax papers bar the P60s.

He knew what was to pay by 31 July 2019, but went on holiday. And then he forgot to pay.

Of course, HMRC did not send out a payslip for 2018/19 2nd instalment because HMRC had credited his SA account with a figure of 2 x the 2018/19 interims.

So HMRC are now catching up and will collect the 2018/19 interim number 2 on 31 January 2020.

The only problem is client thought he was bang up to date. So he had £X,000 in his bank account too much, which he may have subsequently spent on property repairs.

So HMRC has caught client slightly off-guard with the larger than expected 31 January 2020 demand.

Not the end of the world. But for such a well-organised client it has proved to be a little bit of an irritation.

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Replying to atleastisoundknowledgable...:
By penelope pitstop
03rd Dec 2019 18:23

SASOA shows 31 January 2020 balancing payment PLUS
2018/19 interim no 2 payable 31 January 2020 as well.

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