PAYE codes: Emerging problems
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Great article and much easier to understand what HMRC are trying to achieve than any of their own webinars/websites. Sometimes I wonder whether HMRC staff understand their own systems; my client received a new code K1483 under the new dynamic system (which neither of us understood where figures had come from), and I assumed would be amended correctly once SA had been submitted. This didn't trigger off a new code so I called them, eventually we agreed on 500L - big difference!
"It’s surprising how many finance professionals I meet who have not activated their own PTA."
For some reason, I can't get through the security. None of the online guidance and FAQ's have helped.
I just do not understand HMRC. Every simple thing is made difficult.
Just have payroll record BIK. Its not rocket science as used in many countries. I was using it 20 years ago (other jurisdiction)! Then RTI will update records.
And yes I do not have a PTA. The work involved is such I just feel so demotivated. I just cannot see many individuals doing it. Certainly not the older ones.
Then I just do not trust the IT of HMRC. Too many errors.
"We must encourage all employees and pensioners to activate their PTA"
1. I have power of attorney for an elderly relative who can no longer deal with such matters. Can you perhaps direct me to any HMRC guidance on opening another person's PTA in my capacity as their attorney?
2. Many of my clients use an agent precisely because they lack any, some or all of the capacity, skills, inclination or time to deal with such matters.
Why does HMRC continue to refuse to allow authorised agents to log in to PTA's?
My feelings exactly which is why I am planning to leave the profession.
Ditto CarolineC...after 41 years in the profession, I am shortly retiring due to the number of changes such as this, MTD, FRS etc.....they are all unnecessary and HMRC expect us to become more and more efficient whilst they become evermore inefficient and are shielded by a veil of buck passing and inconsistencies. I feel it is a great shame that I am exiting the profession for this reason.
HMRC live in a dreamworld or so it would seem sometimes. I recommend to my clients that they activate the PTA and give them a link to do so. To date as far as I can ascertain only one has tried and he is abroad and cant get authorised. Personally I dont want to give HMRC my mobile phone number. I am sorry but the number of phone calls made to clients with demands for money not owed and the stress that goes with it is not something I wish to experience.
What will be next on the agenda of HMRC's ideas of how to create more administration and systems that don't quite work in a practice ?
More Die Manic than Dynamic.
Thanks Kate,
Great article. We are two man mainly indirect tax disputes and consultancy firm [always stay well away from PAYE]. We pay ourselves dividends and the minimum wage for NI contributions. For reasons I have been unable to ascertain since 01/04/17 we have a debt on file of £1.80 per month. Previously incurred no liability. I lost the will to live trying to find out what it was for and just paid it as penalties could have been imposed. Maybe by registering for PTA all will be revealed?!
HMRC - How to Make things Really Complicated
Tax codes are now at a point I poll to see changes and invariably laugh and ignore them.
The point on PTA's is valid though, as we can now no longer get printed SA302's from HMRC!
I've always wondered what it stood for.HMRC - How to Make things Really Complicated
Smokoe Joe wrote:
HMRC - How to Make things Really Complicated
I've always wondered what it stood for.
Hopelessly Muddled Ridiculous Cluster...
I am ignoring this whole area myself.
If a client has a tax code problem, much easier to sit on hold and have them deal with it than use the P(I)TA account.
As for employees having to sort thing like this themselves it assumes a far too large amount of knowledge on the employees behalf.
It's a very useful article, thanks.
I have had personal experience of this as a taxpayer. After a TUPE transfer, HMRC systems determined that I had two employments with each paid more than I earn. My tax code was changed to reflect that I had no personal allowance in my actual role, so I faced brutal PAYE deductions for a few months.
The 'good news' is that I was able to rectify this through my PTA. I logged in, followed the required links and advised HMRC of the change. Within three weeks my tax code had been rectified.
Is it possible for an agent to use a client's PTA merely by using the clients password etc.?
Very good article. I am a semi-retired businessman and investor. I would like to use my PTA but I cannot give HMRC my mobile number because during the summer I spend most of my time on our boat and am very often out of touch, and at other times I am often abroad in places where the roaming charges are too expensive for me to use my UK mobile number (I buy a local SIM card instead). I fear that if I give HMRC my UK mobile number they might send me a message which I might not receive for several weeks but they will regard me has having received it. I really, really want my accountant to deal with all my tax affairs and I think it is outrageous that HMRC won't let him.
"It’s surprising how many finance professionals I meet who have not activated their own PTA."
I did some time ago and guess what, the one thing I could not see was ...... any tax information at all.
I have not looked at it again.
I have 4 PAYE codes - one each for two small pensions, my SIPP and a directorship which pays me a modest salary. I wanted to receive the first two in full and pay BR on the other two, leaving, after OAP, some allowances to offset my freelance fees. Could I persuade them to do this? No chance. If I, with 52 years' tax experience, can't get HMRC to do things properly, what chance does Joe Bloggs have??
I had a case this morning where they'd changed a client's tax code to W1/M1 and reduced it slightly to 1103L. Turned out to be due to a P11D for an employer loan, but the cash equivalent after interest was zero, so I don't see why it should have affected his tax code at all, let alone triggered an emergency code.
Of course, it shouldn't be necessary to file a P11D at all if an employee has paid interest at the Official Rate, but it's so easy to get those calculations wrong (all it takes is a missing transaction or formula error) that it's better to file a nil P11D for the loan (but showing all the relevant dates and balances) to avoid the risk of a £400 penalty. If it's going to mess up their tax codes, then maybe I'll have to think again.
Reading this article, it looks like this is just one of many ways tax codes can be corrupted. It's what happens when HMRC try to run before they can walk and rush through new automated procedures. All of this should have been thoroughly tested and piloted before being unleashed on the public.
Accountants are in the eye of the storm - we have to deal with these errors but we're not allowed to access the PTA or correct them online. All we can do is phone the agents helpline and hope we get someone sensible.
"Accountants are in the eye of the storm - we have to deal with these errors but we're not allowed to access the PTA or correct them online. All we can do is phone the agents helpline and hope we get someone sensible."
Sounds good but, to be honest, I am beginning not to care what the Revenue do. I think it is possibly best to go with the flow and let them sort these problems out themselves, whilst I go down the pub.
Are we there yet? The most digitally advance tax system in the world? Looks pretty diabolical to me. This is appalling. What hope is there? I'm going to get out for sure. It's too complicated. It used to be relatively simple. Timetable for exit was extended briefly with MTD failing to get implemented thankfully as it is a load of ........
Classic HMRC.
Let's make things more complicated, more costly to admin and a nightmare for anyone having to deal with it to collect in the exact same amount of tax without all this nonsense.
'Tax agents can’t access their client’s PTA even if they have authorisation to act, so any changes the client asks their agent to pursue must be done by telephone. '
This is a recipe for disaster, how frustrating is that going to be.
Great article, thanks Kate.
Must admit feeling a little nervous at all FPS data being viewable by all client employees when we all know how wrong it can be sometimes!
This whole thing makes me shudder. I still have approx 30 years to survive in this profession.............How much more nonsense will I have to deal with between now and then?!
Clients and their employees will not have a clue about any of this. This is a recipe for disaster which accountants will have to deal with, not HMRC, nor clients because this is what they pay us for. The future is bleak....
I also have not been able to get through the security and my PTA is now locked out...... The suggestion is I should start again with a new email address etc!
Is it possible to get HMRC to remove the in year 'underpayment' that is coded out so it is settled via the TR rather than the code?
I have a client who has a large adjustment due to PA being removed but wants to pay with the TR (similar to how potential underpayments worked) but HMRC said they can not remove it.
Anyone had success in doing this?
Thanks
Hideous Muck-Ups from Right Charlies
I am just processing a 2016-17 tax return from a client who has 3 income sources:
1. A PAYE job.
2. Bank interest.
3. Carer's allowance.
Net result from the Charlies is over £2k tax bill, so £3k payment on account assuming the Charlies are continuing with the same stupid blunders in 2017-18.
Talk is cheap HMRC. I will only believe your systems are working when this sort of drivel is not landing on my desk every month or so.