Client has 2020/21 income of £19k from employment with £1,500 tax deducted plus £7k from self employment. Total tax bill £2,700 plus class 2 for part of the year.
I duly worked out payments on account (as did Taxfiler) but HMRC disagree and say they are not due. To be fair they also fined this client for late filing of a fictitious paper return even though it was filed on time via Taxfiler so I suspect the POA error to be theirs too.
£1,500 is not 80% of £2,700 so what am I missing?
Replies (3)
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I do like a good payment on account mystery.
The most obvious explanation would be any "temporary" removal from sa for ye
5/4/2022. Most common reason for vanishing payments on account is where hmrc rightly or wrong remove client from sa for that following year - if that happens payments on account are never reinstated even if hmrc agree that the removal from sa was their fault and should never have happened.
Could it perhaps be that the fictitious paper return was nothing of the sort and simply hmrc incorrectly closing the sa record and processing nil return for 2021 with knock on consequence of the ye 5/4/2022 records also having been closed temporarily?
I do like a good payment on account mystery.
The most obvious explanation would be any "temporary" removal from sa for ye
5/4/2022. Most common reason for vanishing payments on account is where hmrc rightly or wrong remove client from sa for that following year - if that happens payments on account are never reinstated even if hmrc agree that the removal from sa was their fault and should never have happened.Could it perhaps be that the fictitious paper return was nothing of the sort and simply hmrc incorrectly closing the sa record and processing nil return for 2021 with knock on consequence of the ye 5/4/2022 records also having been closed temporarily?
Yes, this happened with one of my clients recently. 2 partnerships created by mistake for the same client, guy at HMRC cancelled one but treated it as a a paper return submitted 28th April to clear it. This kicked in daily penalties from 1st February but fortunately I got them cancelled.