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'In year adjustment' for PAYE

Has anyone else come across a difference between the tax due under SA and that calculated by HMRC

I submitted a client's Tax Return using recommended software. The Return was accepted by HMRC and presumably the calculations agreed. However, when I checked the HMRC website to confirm the amount due, I disovered a small difference of about £71. When I rang the Agents' Helpline, the young lady I spoke to was very quick to tell me what the difference was before I gave her any figures. It turned out that the difference was the 'in year adjustment' put through by HMRC, presumably as part of the dynamic coding.
She told me that this was a recurring problem, and immediately undertook to rectify it.

What a waste of time, mine and hers! It does not inspire me with confidence in MTD. Incidentally, who pays for my time? I can't very well charge the blameless client. And we all pay for HMRC's!

Anyone else come across this? I suppose that if there's enough of us who complain, something might be done ............................... soon.


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By CazzyT
16th Jul 2018 17:23

I don't hold out much hope of anything changing but yes it is a frustration and a massive waste of time.
A number of clients have received a 17/18 notice of coding with an "estimate of underpaid tax for the year" included.
We have now assembled the self assessment return so know whether or not there is an underpayment and obviously do not include the estimate anywhere on the return. The return is submitted only for us to receive a revised computation a few weeks later where HMRC have amended the calculation to include their estimate!
Then begins the lottery of calling up and hoping you get someone sensible on the phone who can correct it without a 3 month wait.

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By Jholm
16th Jul 2018 17:25

Yes! Multiple times lately. We have been receiving tax calculations where they have entered a figure in the 'underpaid tax for earlier years' box because of this in-year adjustment, even for cases where no tax is due, nor has been due for many previous years. One quick call in each instance and they have removed it. One was as little as £50 and the highest was nearly £2,000.

Makes you think how many taxpayers won't notice and incorrectly pay extra tax.

Bodes well for making tax digital...

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17th Jul 2018 15:06

These are a regular feature, although I have had odd examples for many years. The difference now is that the agent helpline folks recognise the problem and rectify it straightaway. Previously, I was told that it had to be included, as it was 'in the PAYE code', without any understanding as to why it had been created.

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24th Jul 2018 12:59

Update: Received a 'Tax calculation' showing the incorrect figures! Had to call my client to tell him to disregard it.

What a waste of my time and theirs and paper, postage etc.

Roll on MTD and Armageddon!!

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27th Jul 2018 16:22

Final update: HMRC have now 'corrected' their incorrect calculation.

I've told the client to ignore it all - I was right first time. Suggested he complained on social media.

Multiply my experience by the number of other accountants and taxpayers just having their time wasted!! The words merry-go-round and mulberry bush spring to mind.

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28th Jul 2018 06:12

I've taken to double checking when an U/P has been coded what year it relates, and if it's in year, I warn the client that HMRC may incorrectly amend the Return when I send for approval.

Doesn't cut down on the time front in having it put right, but it shows the client that I knew HMRC were going to [***] up again in advance.

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to SteLacca
28th Jul 2018 06:13

Hmmmm. What would the filter do if I was talking about male birds?

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