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Phantom P800T refund forms causing grief

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25th Mar 2013
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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.

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Replies (17)

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By Frank Newell
26th Mar 2013 14:26

P800T

Further to previous comments, just received a P800T for a case where the 2011/12 SA return was filed in August 2012 and a repayment made. The P800T shows estimated figures for interest and dividends. We will now have to spend time contacting client and arranging for either the cheque to be returned  to HMRC or a refund made by the client.

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By Ted Numbers
27th Mar 2013 10:01

"According to HMRC's website...

...it is important to check your P800 calculation and contact the Revenue straight away if there are any issues. "" """

Which translates as

"we have no idea if it will be right or wrong, the whole point of self-assessment is that YOU have to do OUR job for us, silly!"

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By a.petch
27th Mar 2013 11:07

Estimated Figures in P800T

My understanding is that HMRC are under instructions that calculations should not be issued with estimated figures of interest or other income in them.

They are clearly ignoring this, as they attempt to reduce the number of cases on their worklists before they are unable to do them when the new year is rolled over.

It just shows the impact of expecting staff to do more work in less time with few resources.

 

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By hiu612
27th Mar 2013 11:25

Penalty

Presumably a P800T counts as a HMRC assessment. So if the taxpayer fails to notify HMRC of any error in the assessment within 30 days, they could presumably render themselved liable to a penalty under schedule 24 FA07.

I wonder if any particularly brazen inspector has chanced his arm on that one yet?!

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Replying to User deleted:
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By Anthony123
27th Mar 2013 19:41

Not so

This point (whether P800 an assessment) was considered in Clark [2011] UKFTT 302 TC but from memory overturned by the Upper Tribunal but cannot find the decision to confirm that.

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Replying to User deleted:
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By goblinf
28th Mar 2013 12:59

P800T is it an assessment?

Not according to HMRC - there were those Tribunal cases, and HMRC got the cases thrown out on the grounds that the assessment was the Notice of Coding in which the underpayment was charged. Can't remember the name, but was discussed in Taxation Mag so if you search the index you should find it.  

Slight own goal for HMRC there if they've got problems with repayments being wrongly issued and they're saying the P800 is merely an administrative convenience....

Which means there's no deadline for a response from the Taxpayer to a P800 and they can't enforce it. Oh look, another own goal 

The route they're now taking if the taxpayer ignores it and there's tax owing - is to issue the P800, then if there isn't any response from the taxpayer, to issue a Self Assessment Return for completion, thus neatly bringing the usually unrepresented taxpayer into self assessment for penalties & interest. For tax that's owed because HMRC haven't done their jobs properly (yes I recognise the staffing issues and I'm not hammering staff here, I'm unimpressed with top level HMRC policy decisions that led to this fiasco).

Difficult to know how they can resolve the double repayment issue - by the sounds of it, most of those affected have already self-assessed, and whilst they'll have a legal obligation to repay any wrong additional overpayment, in practical terms, I wouldn't be too confident that taxpayers would realise what was going on - represented or otherwise unless they get someone who does know pointing it out to them.

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By Annetax
27th Mar 2013 11:37

P800T

I had a P800T AND repayment issued for a client who had been issued with, but not yet filed, his 2011/12Tax Return - he became self employed during the year so the Revenue couldn't possibly have known his full tax situation....

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By mtbutterworth
27th Mar 2013 11:51

P800T

This happens when you , as agent, know the UTR and file a tax return but do not tell HMRC that's what you intend to do i.e HMRC have not flagged the taxpayer as a Self Assessment  case because at some time earlier HMRC have taken the taxpayer out of self assessment.

Really the self assessment computer system should tell NPS that it's received a self assessment tax return - that seems an easy programme to write to me

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Replying to DJKL:
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By Annetax
27th Mar 2013 12:06

P800T

In the case I referred to the tax payer had correctly registered with the Revenue, been issued with a UTR and had a notice to file several months previously...

But he isn't the only case we've had where taxpayers were issued with a NTF and then received a P800T.

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By sammerchant
27th Mar 2013 12:06

P800T

Hey, how many suppliers do you know who give their "customers" refunds to which they are not entitled? Unfortunately, the Theft Act 1968 requires your client to tell HMRC and repay the money. But I wonder if they could charge for their time and costs including postage, perhaps deducting these before making payment.

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By rhysharris
27th Mar 2013 12:20

P800T

I've also received plenty of these. One commentator said that HMRC were now paying his fee for sorting the matter out. How do you go about claiming your fees from HMRC?

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By ricktay
27th Mar 2013 12:21

P800T

We have a reverse situation.

Client who is under SA (and has been for some years) receives a calculation including jobseekers in the income. Turns out that they had applied for jobseekers but had been turned down, However HMRC had used the amount applied for as an "estimate" of income received......

Pretty tricky on several levels and considering a fomal complaint.....

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By The Black Knight
27th Mar 2013 12:26

Role on RTI

Can you imagine the sheer efficiency of the [***] up department when this hits?

[***] up was a customs derived expression too! ho ho

you could say they invented it.

 

On a serious note we have seen PAYE P800 repayments dating back to 2005/06 suddenly appearing, haven't appealed (for obvious reasons LOL) but did wonder whether the normal time limits had expired or is this HMRC admitting they have been negligent?

or is it just a homer ism ?

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By Ajtms
27th Mar 2013 14:04

Claiming your fees from HMRC

In reply to rhysharris, you make a separate itemised  invoice to your customer for all the unnecessary work that HMRC caused you to undertake and you ask your customer to pay this. Once the bill is paid you suitably receipt the original invoice and then send that to HMRC in confirmation of the financial loss suffered by your customer. Assuming that HMRC agree that it is all their fault they will then send a cheque to your customer to cover their fees to you.

HMRC stipulate that the fees must be reasonable which means that they are a true reflection of the time you have spent at your normal hourly rate. I have never had a problem with this as my fees have been honestly charged, nevertheless, sometimes they run into seveal hunderds of pounds to cover the work done in correcting HMRC's errors. If HMRC refuse to pay the fees, then take the matter to the Adjudicator's Office.

 

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By wyoming
27th Mar 2013 16:30

P800T

I have had several cases like this - have usually been able to nip them in the bud by ensuring that the client does not bank the erroneous refund and then sorting the mess out with HMRC afterwards.

Surely it shouldn't be too difficult for HMRC's systems to put a bar on the issue of P800T forms in years when there is also an SA record? Or am I just being naive?

 

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By rota2
28th Mar 2013 13:49

Yes, has happened to one of my clients

HMRC had incorrectly not issued a 2012 tax return even although the client was still self employed and HMRC had not been informed otherwise.

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By harbourmaster
29th Mar 2013 13:03

P800T demand

My panicky retired little-old-lady client has just received a P800T for 2009-10 showing tax chargeable of nil but an underpayment of £2,533 due to a tax refund issued.

The refund was claimed on an R40 which included a triviality pension lump sum - fully taxed. This was completely omitted from the P800T.

Quote from the Agents' helpline 'Sometimes these things aren't joined up' - But at least the phone call only took five minutes and I'm promised a revised P800T to confirm no tax due.

Shame about the frightened client though.

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