A PAYE client had an in-year adjustment to his 2017-18 tax code as a result of changes in expenses. When HMRC processed the 2018 Tax Return HMRC issued a SA302 stating the adjustment was for an earlier year. I've spoken to the ADL and been told there is a 'technical' problem which has resulted in HMRC erroneously converting in-year adjustments to underpayments for previous years. The officer I spoke to said this is a wide-spread problem (possibly because 2017-18 was the first year of dynamic coding). The officer told me that HMRC's solution is to wait for agents to report individual clients to HMRC. HMRC then adjust the return to what it was originally filed by the agent. The agent then has to wait 48 hours then contact HMRC again to request the refund.
I was unaware of this 'technical' problem and am therefore posting to bring it to the attention of the wider agent community.
I feel HMRC's 'solution' is inadequate. HMRC should be proactive and fix the problem before the agent reports it. And what about unrepresented taxpayers?