Client, a PAYE employee amassed BIK underpayments 2016-17 & 2017-18 both individually less than £200 both appropriately coded and timeously calculated on P800’s.
2018-19 saw an in-year BIK underpayment of £2700. £2400 was coded 2019-20 the balance was coded 2020-21.
28 Feb 2020 client changed employment starting new employment 3 March 2020. On 4 March HMRC issued Simple Assessments 2016-17 & 2018-19 with demands for June payment. Client received new coding for 2020-21 removing underpayment but no revised coding for 2019-2020. Old employer issued M11 P45 with old code and new employer operated old code for M12. (We registered as new client on-line May 2020)
We advised HMRC the Simple Assessments were incorrect and as an aside client will be registering 2019-20 for Self-Assessment as rental income has commenced.
HMRC response was that towards end of 2019-20 there was a major review of Simple Assessment; it threw up some anomalies and it has put in a best fit for majority of taxpayers and our clients u/p’s for the two years have been bought into Simple Assessment. They say they issued new 2019-20 code removing the u/p restriction meaning a refund should have been made but the change of employment prevented the code being used. HMRC suggested sooner we submit SA 2019-20 client can have refund. They suggest answering “no” to the question asking if any underpayment has been included in the code.
Needless to say, we will be replying to HMRC about their "computer reviews"; their views and their suggestions but has anyone else experienced retrospective Simple Assessments?