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HMRC threatening bankruptcy for fictitious PAYE.

Has anybody else seen HMRC asking for PAYE liabilities which don't exist?

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A client forwarded us a letter that he received today from HMRC and they are threatening bankruptcy on our client if the liability isn't paid.

HMRC have sent a breakdown, as of yesterday, of the liabilities outstanding which covers several months of this tax year. We logged onto our agent account and it shows all the liabilities, which agree to our RTI's, and they all have matching payments to them.

However when we use the clients logon the main page shows the outstanding amounts as per the HMRC letter, but when you look into it in detail the figures all agree to our logon details.

This is not the first time something like this has happened, several weeks ago a client had a visit from HMRC bailiffs for a large outstanding PAYE liability. When looking online the liability for the month was almost double what we had submitted by RTI. Neither us nor HMRC know why this has happened but they are still investigating. Obviously this was embarrassing for our client who had customers on the premises at the time.

Has anybody else had similar issues?

Replies (20)

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RLI
By lionofludesch
12th Sep 2017 12:26

A few years ago, yes. Caused by very obvious duplications in the RTI records once we finally got hold of them after about six months.

Someone posted an email address for RTI disputes about a month ago.

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RLI
By lionofludesch
12th Sep 2017 12:37

I have to add that if some DMB knuckledraggers came to me threatening court action over money I didn't owe, I'd say "Good - maybe now you'll get on with replying to my very reasonable rebuttal of your assertion."

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By JDBENJAMIN
12th Sep 2017 12:39

I is quite common for the balance figure on PAYE online to not match the drilldown figures. This has been so for several years.

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By spcm
12th Sep 2017 13:38

I have also had client received a letter from debt collectors on behalf of HMRC showing (as we established from HMRC) a totally fictitious amount of PAYE due. HMRC reallocated payments which hadn't been done, and came up with another figure due which has been paid. We need to check that it has been allocated properly, as the agent's view of the PAYE (and his), both show no payments since he started as an employer. Not only that but it used to be that HMRC only put amounts to debt collectors if late payment letters had been ignored/no payment made after a period of several months. None of this supposed debt was any more than six month old and no letters received relating to it!! HMRC absolutely have no idea where they are on RTI - it all seems to have ended up in complete chaos - really looking forward to MTD!!

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Caroline
By accountantccole
12th Sep 2017 13:39

I had a mild panic about my own PAYE this week. What was showing as due excluded the Ers allowance, even though the RTI all happens at once, it seems the Ers bit gets updated later. Friday I owed £1k, Monday it dropped to £700.
No wonder clients get confused.
It would be nice if they could get these things working properly before trying to launch MTD. It isn't unreasonable for a tax payer to be able to rely on the information being held by HMRC but it seems to be wrong so frequently

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By timothyvogel
12th Sep 2017 15:34

This week client rang . HMRC bailiff on site asking for £782.35 from month 6 last year. To be fair it had been paid late, but had been paid. Indeed bailiff agreed that in addition the account was £782.35 in credit for the current month not yet due!

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Replying to timothyvogel:
RLI
By lionofludesch
12th Sep 2017 16:37

Won't have occurred to them that there was a possible link.

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By seonaid anderson
12th Sep 2017 18:16

agree - we have a very recent demand for 2011-12 PAYE. (newish client). Agent online view is different to client online view is different to HMRC employers unit is different to debt collection..
Onus is on us to prove if it is not due....again bankruptcy threatened..

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Replying to seonaid anderson:
RLI
By lionofludesch
13th Sep 2017 09:19

Au contraire. The onus is on HMRC to prove that the debt is due.

Point that out to them.

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By mbee1
13th Sep 2017 08:07

It surprises me that a simple thing like a manual check doesn't happen before these final letters get sent out or the bailiff goes knocking on the door. i had a case a couple of years ago to which i responded to them - "I shall be delighted to see you knocking on the clients door and taking then to court as I have all the proff you need to confirm it's been paid" Never heard anything back.

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Replying to mbee1:
RLI
By lionofludesch
13th Sep 2017 09:29

Way to go.

Respond to aggression with agression.

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By Zarozinia
13th Sep 2017 09:45

Client receiving frequent letters from HMRC debt department for underpayment this year. I first reported to HMRC that we had a figure showing as due in June when everything had been paid. Spent ages going over everything with adviser on phone who agreed that the amount paid was correct and that Basic Tools RTI had mysteriously duplicated some of the liabilities. It has been referred to 'technical support' who will investigate and get back to me if I need to do any further submission to correct the system at their end. This will take an indefinite period and there are notes on the account that the money is not due. On receipt of first debt letter I rang debt department to explain the situation and they have marked at their end it is not to be pursued. The letters keep coming, each a little more aggressive than the last but when I ring back to query them nobody knows why the system is still sending them out.

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Replying to Zarozinia:
RLI
By lionofludesch
13th Sep 2017 10:02

In the dispute case I had, I'd allocated employee numbers to staff in preparation for AE. We'd always been happy using something called Names before and found that quite satisfactory but People's Pension insisted on numbers. Some of the employees objected. Number 6 said, "I am not a number - I am a free man!!"

Anyway, there was a suggestion from HMRC that adding a number was the cause of these duplications and it was all our fault. What they didn't explain was why only three of the twenty odd employees had their records duplicated.

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Replying to Zarozinia:
By SteLacca
13th Sep 2017 10:08

Zarozinia wrote:

get back to me if I need to do any further submission to correct the system at their end.

Let them eat cake. I refuse point blank to make additional submissions to correct HMRC errors caused by their own systems. If I make a mistake, I fix it. If they make a mistake, I expect them to fix it.

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By johnacarpenter
13th Sep 2017 14:33

I have received a text message regarding VAT. On calling the number quoted HMRC said this was a new system and confirmed that all my clients VAT liabilities were nil.
I also received letters from HMRC regarding Corporation tax in this case the payment had been made and received by HMRC, but allocated to the wrong year. Apparently it was my fault they didn't sue the correct reference for the payment. Of course this is not available on the agent page.
HMRC systems have always been a bit flaky !!

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Replying to johnacarpenter:
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By Wanderer
13th Sep 2017 17:55

johnacarpenter wrote:

I also received letters from HMRC regarding Corporation tax in this case the payment had been made and received by HMRC, but allocated to the wrong year. Apparently it was my fault they didn't sue the correct reference for the payment. Of course this is not available on the agent page.
The correct payment reference is in fact available on agent online.
I always give client the correct reference to help allocation to the correct year.
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By rhino83
13th Sep 2017 14:44

A further update on this, after spending considerable time on the phone to HMRC.

A technical expert outright told us that we shouldn't rely on the online information because it isn't accurate.

It looks as though the final liability for 2017 wasn't paid and the payment for April 2017 is shown twice on the online system where it has been allocated against the final liability for 2016/17 and the first liability for 2017/18.

We are now investigating this further as the bank statement shows the amount paid.

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By Bruce Roberts
14th Sep 2017 09:19

A client had bailiffs knocking on the door so I took up their case. It turned out to be a HMRC 'system error' but I spent hours and hours on the case trying to proove that the amount was not due. We ended up billing the client more than the amount due. HMRC paid some of this and the remaining claim is with the Independent Adjudicator.

To cut a long story short my approach next time will be to refuse to do any extra work and insist that HMRC either carry out a PAYE inspection or go to court. I will refuse to waste time sorting out HMRC's problem is future.

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By Kate Upcraft
14th Sep 2017 10:22

Interesting that a 'technical expert' said to Rhino83 'don't rely on the figure in your business tax account'. As I wrote in my recent article https://www.accountingweb.co.uk/tax/hmrc-policy/business-tax-accounts-ge...
the BTA has had an upgrade that finished roll out this week (although the breakdown page and the DMB payments received page has now mysteriously disappeared but should remerge I'm told). The data is now called from a different part of HMRC so from now on is supposed to match RTI data exactly, so any discrepancies are real now and need to be followed up as a disputed charge. Only as part of this roll out have they admitted that for the last four years there were batch processing errors that led to the liabilities displayed not matching what they could see. As to the DMB figures I don't expect any improvements in payments recorded and allocated as ETMP still seems unpredictable and unstable!
I too like lionoffludesch entered employee numbers for People's pensions for two employees in July and one duplicated and one didn't! I'm still pushing HMRC to get round the table and discuss how they have business rules that infer second jobs from simple changes to personal data. I'll probably retire before we start to see RTI working as HMRC's 'customers' need it to but at least I will have tried!!

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