Member Since: 13th Aug 2007
21st Apr 2014
If a claim to an Allowance is made by an Individual, to which the Individual is not entitled too in law, then there is an offence.
If HMRC fail to properly compute an Allowance or Deduction – e.g. BiK for £300 instead of £600, then there is no obligation on the part of the Individual to notify HMRC.
When one considers the vast number of failures in PAYE Code calculation by HMRC, resulting in claims under ESC A19 over the past few years.
There is also the regrettably situation where HMRC “calculated” that some Taxpayers were in receipt of Company pensions which combined with the State Pension gave an income total which was less than the standard Personal Tax Free Allowance. HMRC proceeded to remove these cases from their computer records. When the National Audit Office reviewed the situation and discovered that many of these removed cases were in receipt of other additional income, giving rise to a loss to the Treasury estimated at around £430 million in tax, guess what? HMRC blamed the Company Pension payers, but recovered none of the estimated £430 million. You can do quite a bit for the country with £430 million?
21st Apr 2014
As mentioned, the PAYE system is based on estimates which are intended to ensure that at the end of the year the correct ( or as near as possible ) amount of Income Tax is collected.
HMRC take the view that any Individual can appeal against their PAYE Coding for whatever reason, but the actual calculation of Income Tax due for any particular year will be accurately computed by HMRC at the end of that particular year. The fact that this calculation may be called “an informal calculation” is said by many to be due to a major failure by HMRC to understand their own business, Income Tax being an annual tax, not a weekly or monthly tax.
It would appear that regrettably HMRC are no longer focusing on annual review of liability for cases other than those falling within the provisions of Self Assessment, and therein lies a problem.
The fact that one suspects that a PAYE Code Number is inaccurate is not something that is legally reportable. The fact that one has claimed some allowance or deduction which is wrong is “reportable”.
It is said by many that HMRC’s current modernisation of PAYE, which appears to rely entirely on the development of more digital transmission, shows an astonishing lack of business understanding by HMRC.
19th Apr 2014
It is worth noting that there is no regulation which compels an Employee to produce "official documentation proving that they have a right to work in the UK". There is however a liability on Employers that where they employ Individuals who have no right to work in the UK. This liability results in heavy fines. However, there is a duty on HMG and the various Departments to prove that an Employee has no right to work in the UK before any fines can be imposed. The idea that we all have bar codes tattooed on our foreheads before we can be employed is still a bit away, we hope?
19th Apr 2014
PAYE Code Numbers
In the rush to bring PAYE into the 21st century some individuals have overlooked the first principle of PAYE which is that a PAYE Code Number is based on an estimate of a Taxpayers net tax free allowances and an estimate of a Taxpayers taxable income for the year in question. The estimate is calculated by HMRC based on the information they hold / provided to them. If a Notice of Coding is issued, it can be appealed by the Taxpayer on the grounds that the figures used in the estimation are incorrect. It is very unfortunate that this simple logic is not known by so many HMRC employees.
21st Sep 2013
Scottish Variable Rate
It is interesting to note that HMRC state that it is "important" to notify them about a change of address, but there are many who are of the opinion that "important" is not he same as mandatory nor that it means it is a legislative imperative.
However when one considers the possibility of the introduction of Scottish Variable Rate on the level of Income Tax liability, notifying asa a matter of course may be worth hinting about ?
7th Mar 2013
Scam - Sham
One would have thought that the Employer was operating NI deductions in accordance with any Exemption Certificate, issued by HMRc or by the fact that the income was "pension" income.
If the Employer was not deducting NI on the grounds that they "though the bloke was over a certain age", I trust that any NI repaiyment or penalty is directed to the Employer and not the Employee.
It is also interesting to note that HMRC will NOT change their system records in respect of Names or addresses, because of Employer supplied data, insisting that HMRC computer records can only be changed if the information comes directly from the Employee. Some suggest that assuming that the HMRC data record is correct and the Employer / Payroll record is not as up to date is not supported by any evidence, but would that matter to HMRC who insist that the 215 million Untraced NI Contributions that they hold are not due to any fault of theirs ?
6th Dec 2012
The logic that
"If no-one in the PAYE scheme pays tax or earns above the NI threshold, then there's no reporting requirement under RTI."
would seem to defeat the base logic of the ability of DWP to ensure, via the HMRC PAYE system, that State Benefits are paid correctly.
It is perfectly acceptable to have one PAYE scheme where some employees are above a threshold and some below, and then proceed to set up another new PAYE scheme, transferring all those below the threshold into the new PAYE scheme, thereby avoiding RTI Reporting. Not what was intended?
The idea that a very costly national system is introduced, but there are siuations where DWP operate as they have done in the past, would seem to indicate a failure in analysis and understanding of Business Process?
6th Dec 2012
Hold that thought, it may provide some interest in any Penalty discussions in the future?
Worth haveing a look at these two links?
and noting that the Cabinet Office Major Projects Authority has given the RTI an Amber Warning, according to the lastest report by the Public Accounts Committee.
I suspect that the bottom line will be - "Sorry but You Done It Rong and there is no Appeal, so just Pay Up !! "
6th Dec 2012
There appears to be a hole in HMRC's basic design of RTI
The idea was originally that all "earnings / income" would be available to DWP so that the correct amount of Benefit could be paid to an individual. However there are those who say that the involvement of HMRC with the use of the Bacs system has stopped some basic thinking as to how to efficiently operate the system.
The fact that an Individual "earns" an amount of money, be it above or below the limits which HMRC previously and currently consider to be relevant to the PAYE system, is relevant to the payment of State Benefit.
The fact that HMRC do not appear to have covered all the potential situations in which RTI is mandated, is of consern?
8th Aug 2012
Just wondering how much consideration HMRC have put into the work that will be involved in dealing with missing or perhaps incorrect NI Numbers?
Paper boys and spouses may not have their NI Number to hand and the logic appears to be that the Employer ( or Payroll ) will get this sorted.
Making it easy for Employers? I suspect that the costs of engaging with RTI will be different from those quoted by the All Party Parliamentary Group on Taxation or those quoted by HMRC?