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HMRC not creating 2019/20 POA

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Apologies in advance if the reasoning behind this is glaringly obvious, but I've had some guidance from HMRC which I can't wrap my head around.

We have a client who is always late supplying information. In fact we've only managed to have his tax return filed very late at the end of last month.

He was sent a calculation which he forwarded on to us which has not taken into account his 2019/20 payments on account. I assumed this was an issue with the POA "glitch" that has been ongoing, but upon ringing HMRC the individual there advised this had nothing to do with the glitch and that HMRC would not ask him to make any payments on account as the return was submitted late.

Has anybody who has submitted a late return been offered a similar explanation for the payments on account not being captured? I have asked HMRC to clarify their position in writing but I am half tempted to tell the client to make the payments on account anyway so they can't change their mind further down the line and sting him with late payment charges.

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By Wanderer
01st May 2019 14:15

It's just a case of the HMRC representative making it up as they go along.

See if they confirm in writing - bet they don't.

Thanks (1)
By Paul D Utherone
01st May 2019 14:32

I suspect that it's to do with the known issue re POA's.

HMRC response on the Agent forum as below:

SA202 - HMRC Response Provided - Missing 2018/19 payments on account
04/02/2019 14:42:51
*****
Thank you for raising this issue on the Agent Forum. Please find the response from the relevant team below.

• Our Help line advisors have been provided with guidance to enable them to create the missing 2018/19 payments on account only if the payment is held on the customers Self Assessment account by 31 January 2019..

• Agents do not need to notify us of any further cases where 2018/19 payments on account are missing. However, if they specifically wish the 2018/19 payments on account to be created the payment should be already on the customer’s account by 31 January 2019. Then they can continue to ask for the 2018/19 payments on account to be created if they prefer.

• It is possible that payments intended for the 2018/19 first payment on account may be repaid if the 2018/19 return is submitted, 2018/19 payments on account have not been created and a repayment is claimed on the return. However, there would be no interest implications providing the 2018/19 liability was paid in full by 31 January 2020

• Where 2018/19 payments on account should have been created but haven’t, any liability due for 2018/19 will be due as a Balancing Payment in January 2020.

We have included examples illustrating the payment position for a customer where the 2018/19 payments on account have now been created following customer/agent contact and the position where payments on account have not been created. These examples cover the amounts due for 2018/19 and are for a customer who would normally have 2018/19 payments on account of £1000 (each POA) and an overall Self Assessment liability of £3500.

Payments on account created at customer agent/request
Due date Charge Amount due
31/01/2019 2018/19 1st Payment on Account £1000.00
31/07/2019 2018/19 2nd Payment on Account £1000.00
31/01/2020 2018/19 Balancing Payment £1500.00

Payments on account not created
Due date Charge Amount due
31/01/2019 2018/19 1st Payment on Account £0.00
31/07/2019 2018/19 2nd Payment on Account £0.00
31/01/2020 2018/19 Balancing Payment £3500.00

• If the 2018/19 first payment on account has been paid in full by 31 January 2019 then no interest should be charged even if the 2018/19 first payment on account was actually created after this date. We are happy to review cases where interest has been charged on 2018/19 payments on account due on and paid by 31 January 2019. Please send the UTRs to our mail box [email protected]

• Customers can make payments in advance on their statement of account if they wish as they will have a higher 2018/19 Balancing Payment to pay in January 2020.

• We can confirm that we are currently working to ensure that 2018/19 returns will correctly create (2019/20 payments on account).

We apologise for any inconvenience caused by this issue.

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Replying to Paul D Utherone:
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By Bob Loblaw
01st May 2019 14:41

As mentioned I did initially think it was due to the pre-existing issue HMRC have notified people of, but the chap at HMRC was rather adamant that the two weren't linked and it was solely down to the tax return being filed late. I suspect you are probably correct however and I had the misfortunate to speak to one of the 99% of HMRC's staff who couldn't locate their own buttocks with a map and a sherpa.

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Replying to Bob Loblaw:
By Paul D Utherone
01st May 2019 14:43

Sorry. That'll teach me to skim read and miss a salient point in the question!

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RLI
By lionofludesch
01st May 2019 15:54

They'll only clog you for interest on a POA, which is pretty cheap to be fair.

Depends how much the POAs are, obviously, but there's a good chance that, even if interest is charged, it'll be cheaper than your fees for resolving it.

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Replying to lionofludesch:
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By Wanderer
02nd May 2019 00:48

If you leave it and don't insist on PoAs being created then no interest. HMRC shouldn't actually create the PoA unless you insist:-

HMRC wrote:

There is an ongoing problem whereby POAs for 2018-19, in some instances, have not been created from the 2017-18 tax return.
The due date for the first POA for 2018-19 was 31 January 2019. As this date has now passed HMRC should not create a POA unless individuals in SA have made a payment to cover the POA or if they, or their agent, insists on POAs being created. If HMRC create the requested POAs interest will accrue until the payment is made.

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By Not Anonymous
01st May 2019 20:34

Surely this is the crucial thing here.

Bob Loblaw wrote:

We have a client who is always late supplying information. In fact we've only managed to have his tax return filed very late at the end of last month.

How could filing the 2017:18 return ever have resulted in the creation of payments on account for 2019:20?

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Replying to Not Anonymous:
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By Wanderer
02nd May 2019 00:42

I assumed that the OP meant 2018/2019 PoAs.

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Replying to Wanderer:
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By Not Anonymous
02nd May 2019 07:25

Wanderer wrote:

I assumed that the OP meant 2018/2019 PoAs.

In that case the ATT article on this suggests it is the original problem. Looks like the client can earn a bit of interest and just pay 2018:19 in full in January. If they can manage to avoid being late again!

The fix is tax year specific and it is possible that late-filed 2017-18 returns could still be affected so that 2018-19 payments on account may not always be generated on HMRC’s systems.

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Replying to Not Anonymous:
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By Bob Loblaw
02nd May 2019 09:28

Oops. My mistake, I mean 2017/18 tax return, 2018/19 payments on account. My proofreading skills are terrible...

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RLI
By lionofludesch
02nd May 2019 09:15

All this will become a thing of the past with MTD.©

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