AccountingWEB members are reporting an outbreak of P800T forms showing overpayments of tax when taxpayers have already claimed refunds and received replayments through self assessment.
AccountingWEB member Clint Westwood brought the issue to members’ attention on Any Answers recently with an account of his experiences: “We have had a few cases recently of forms P800T being issued by employer districts, in respect of our clients, showing overpayments of tax for 2011-12,” he said.
“But the clients concerned have filed 2011-12 self assessment tax returns, the overpayments claimed thereon and already repaid.”
The post drew a flurry of similar comments from other members, and was picked up in AccountingWEB's Working Together discussion group, where several more said they had encountered this issue. In several instances the redundant PAYE tax calcuations, which are the result of a programming oversight, were causing problems for clients.
Homeworker had seen a few instances of dual PT800s being issued over the past year. In one recent case, the client ended up with two large refunds, “which he unwittingly banked, as he did not understand what happened. The PAYE refund arrived in January, when I was too busy to react quickly and now he has to pay back one of them,” Homeworker reported.
Stewee’s client “had a weekend of worry” when three years’ worth of underpayments arrived on a Saturday.
“The HMRC explanation was that client had a temporary NI number so there was no link to SA. I have asked them to issue explanation and apology to my client, but nothing yet,” said Stewee.
Ajtms upped the ante with a PAYE refund notice received for a customer who died in June 2010.
“An SA100 was completed and lodged for the period to date of death and by December 2011 HMRC issued a formal clearance letter so the estate was distributed and my file archived,” said Ajtms.
“In October 2012 we received a P800 for 2010/2011 with an accompanying formal assessment notice as they wanted to illegally charge tax on 52 weeks’ worth of state pension whereas my customer was only alive for nine weeks in the year. They totally ignored the SA100 and the fact that they had issued a formal clearance letter. HMRC are now paying our fees.”
HMRC said it had isolated the issue behind the mis-issued refund notices and was working to resolve it.
“Most customers’ tax affairs are automatically and correctly worked out by our systems. A minority of customers who are in both SA and PAYE get their affairs worked out by both systems, incorrectly, and we regret the inconvenience this causes them and their agents,” a spokesperson said.
According to HMRC's website, it is important to check your P800 calculation and contact the Revenue straight away if there are any issues.
Karen.morriscook said the issue has been raised at Working Together meetings, with the Revenue reiterating that it wasworking on a solution.
Tax faculty member Shirley Martin gave a more detailed explanation of an issue that has been kicking around since December 2010, with some insights into the department's efforts to resolve it.
The national insurance and PAYE system (NPS) and SA system run separate databases, with automated transfers passing data between them, Martin said.
“One of the processes is where NPS should be notified automatically when an SA record is set up/closed down (SAM100090). The process is supposed to set the SA indicator on the NPS record. The purpose of the indicator is to tell NPS that a P800T is not required because the tax will be settled through SA (PAYE 93032),” she wrote.
“The first cases of SA taxpayers getting refunds from NPS were attributed to a reported broken link between SA and NPS.”
Although HMRC has been aware of the problem for more than two years, Martin has not yet heard that the link has been fixed. Previously, one AccountingWEB member had been told that that the record-linking had to be done manually.
Martin added that HMRC may not be able to identify the affected cases, so when practitioners contact HMRC about inaccurate P800Ts they need to ask for the NPS record to be corrected so the SA indicator is set.
"Otherwise refunds could issued for future years as well,” she said.
Have you had similar experiences? Let us know here by commenting below, or keep tabs on further developments by joining the conversation in our Working Together discussion group.