HMRC's random allocation of PAYE payments

Does anyone know the logic behind how HMRC allocate payments to PAYE

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Does anyone know how HMRC allocates PAYE payments if the client doesn't include the last four digits for the year and month after the accounts office reference?  Trying to balance a client's PAYE account seems almost impossible.  The client was behind but made separate payments online for the correct amount each month.  However,  HMRC has allocated some to month 12 of last year and some to random months of this year, some of which aren't even due yet, and mostly broken down into piddly wee amounts we can't reconcile with anything.  Does anyone know how HMRC breaks up the payment? 

Until recently, we did it the old fashioned way, where clients posted cheques to us and we forwarded them on to HMRC with a payment slip, that way we could keep an accurate record of payments, but now we've no idea what's going on.

Thanks

Replies (16)

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By Gone Sailing
16th Feb 2021 12:26

Oh, how I wish I knew.
In the middle of one, I have the identical question.

The real gem is this:
Us: "Hello HMRC, how much does my client owe?".
HMRC : "Your client is supposed to keep accurate records".
Us: "Can we have a print?"
HMRC: "No".

The agency access to the PAYE account, is, let's say, found wanting.
Why doesn't HMRC understand that there is an army of dedicated accounting professionals willing to help, (and charge the client!) if only they would let us?

I'm going to write a very long letter. Wish me luck.

Any Aweb help for the OP would be much appreciated.

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By Duggimon
16th Feb 2021 12:30

They take the PAYE payment and turn it in to chips of varying denominations. They then gamble these on roulette tables. They carry on until they have lost all their money.

Each losing number is used to generate the period to which the lost bet is assigned. Depending on how busy they are they'll make lots of little bets or just a few large bets. If a zero comes up on the wheel they take the whole amount and set it against VAT.

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By User deleted
16th Feb 2021 12:36

Even with the correct reference quoted, they allocate the payment using voodoo.

They send letters saying you are late, you need to pay £xyz, which includes interest of £xx, then client pays, quoting the correct reference and they still allocate it by making it up as they go along, dont pass the interest, so split the extra interest payments depending on what day of the week they think it is.

Agree with 'Gone Sailing' - try to help them, they will not give you a breakdown. If you, oh, slapped legs, go in to the clients log in (with them sitting next to you, but socially distanced, of course) it still makes no sense.

They really are useless

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By Truthsayer
16th Feb 2021 12:37

My experience is that even if you include the last four digits in the reference, HMRC will often still allocate the payment at random.

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Replying to Truthsayer:
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By Barbara G
16th Feb 2021 12:46

Yes I think that's our experience too. We had assumed the client hadn't included the last four digits, but on second thoughts, he knows what he's doing, so wouldn't normally omit that information. Lately too, even those payments we've sent by cheque with a payslip and an accounts office reference including last four digits written clearly on the cheque, haven't been allocated correctly. It used to be fine by cheque, but no longer. Don't know what's going on

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By K81
16th Feb 2021 12:51

slightly different but why don't they send overpayments back to the client ? Just the thought of contacting Employers section makes me unwell!

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Replying to K81:
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By Gone Sailing
16th Feb 2021 13:17

If it's 'mid-year' they work on the basis that there may be a payment next month, and therefore sit on it.
Therefore you have to wait for the tax (PAYE) year end unless you swear that there will be no further liability.
If you are closing the scheme you have a better chance.

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By SXGuy
16th Feb 2021 13:03

They make it up as they go along.

Does anyone remember days gone by when rti was coming in and hmrc would call to "check our figures match with yours" which was basically them saying, we have no idea what the figures should be and are sneakily asking you to provide yours to us.

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By Gone Sailing
16th Feb 2021 13:29

I think it's fair to assume that it's all done by a computer, which was programmed by a human.

Let's say you're a programmer with no ledger experience. What's the brief? Presumably use the date reference with a huge dose of FIFO.

If the client is late and gets out of sync, and there's interest, or the client pays £45 instead of £54, and the whole thing unravels like a cat playing with a bowl of wool.

Presumably FIFO takes over, the interest accumulates and there's no way back.

So it needs a contact / case worker, y'know, like if you had an ongoing reconciliation issue with a supplier.

Ultimately, you would think, that if you could pin down a specific amount, pay it, press enter, like in real life, the whole thing would clear and reset.

Too difficult.

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By lionofludesch
16th Feb 2021 13:46

As I recall, before I stopped bothering checking, they allocate the money to the oldest debt, then interest and penalties. At one time, this would've minimised the interest charge to the taxpayer as there was no interest on interest but I'm not convinced it does now.

Again, back in the day, they would allocate against NI before tax because the NI was paid over to the DHSS. I don't know whether they still do this now that there isn't the same demarcation any more.

I believe the current system is that Sophie in Data Processing allocates it according to her fancy on the day of receipt.

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Replying to lionofludesch:
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By Gone Sailing
16th Feb 2021 14:01

Thanks, that was nearly a home run, but you tripped at the gender reference.

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Replying to Gone Sailing:
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By lionofludesch
16th Feb 2021 15:25

Gone Sailing wrote:

Thanks, that was nearly a home run, but you tripped at the gender reference.

Gender reference ?

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Replying to lionofludesch:
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By Wanderer
16th Feb 2021 15:43

lionofludesch wrote:

At one time, this would've minimised the interest charge to the taxpayer as there was no interest on interest but I'm not convinced it does now.

Don't think it would have had that effect. Pre RTI there wasn't any interest, unless paid post 19 April after the year end.
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By Barbara G
16th Feb 2021 14:43

The issue I'm struggling with is, when I log on as an agent, I can see payments received, when I click to the left I can see to which months HMRC allocated the payments. However, when I go to the first page, which shows allocations, the said payment hasn't been allocated there at all and it shows as no payment received. As far as my records are concerned the client owes nothing. As far as HMRC records are concerned it's a different story altogether.

It's a pity HMRC phone lines don't stay open til 8pm as they did before this pandemic, things were easier sorted then. Those days I could bring the file home, have had the dinner made, ironing done and put away by the time I got through on the phone so the time on hold wasn't wasted.

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By kathyk0410
16th Feb 2021 15:10

I was going to post a similar question - think HMRC software has had a hiccup this month as quite a few 05/01 payments with 2109 indicator have been allocated to the liability due 05/02 - with some having interest added! It seems to be more of an issue this month than usual.

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By Wally
22nd Feb 2021 12:27

I know what I would expect to happen and that is that the payment should be allocated to the earliest liability. However I have been trying to get HMRC to do this for a client with SA payments without success. Accounts office have charged late payment interest for payments which are not late and even deduct them from payments made prior to the charge being quantified.

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