Freelance tax writer
Share this content
Tags:

Tax reconciliation errors affect ‘thousands’

9th Oct 2014
Freelance tax writer
Share this content
AIA

HMRC has “stopped” issuing income tax repayments after a leaked email revealed that end of year tax reconciliations for thousands of taxpayers may have been calculated wrongly, the Telegraph reported this morning. An HMRC spokesman told AccountingWEB that the process is “continuing as normal”. But the email, now reproduced below, said that some large employers were involved “so several thousands of employees may be affected”.

Elaine Clark, who runs the tax practice CheapAccounting.co.uk, said she understood that repayments for 2013/14 had been halted. “This concerns me enormously given that RTI was meant to correct all evils, all payroll information would be up to date and everyone would be paying the right tax. How can we get reconciliation errors? There has to be something in the system,” she said.

Employers had invested time and effort in RTI and were putting good data into the system. “At what point does that go wrong?” She added: “HMRC needs to step up to the plate very, very quickly and find out what the problem is.”

[More on this story: HMRC apologises for P800 errors]

The Telegraph reported that “HMRC said tens of thousands would ultimately be affected but admitted it currently had no idea about the scale of problem”.

It added that a spokesman for HMRC said the incorrect letters were not demands but merely tax summaries, and that “no one has been asked to hand a penny over in tax because of this”.

HMRC told AccountingWEB: “The majority of the errors have happened because an employer failed to make a final payment statement for the 2013/14 tax year meaning our records were incomplete despite reminders that these submissions had to be made. We are sorry this has happened and we will  issue corrected calculations in the next few weeks.”

HMRC note to stakeholders

[Update at 13.45] HMRC has provided a copy of the note sent to stakeholders including employers, professional bodies and business groups. It is reproduced in full below.

"We are today emailing our stakeholders to explain that we are aware that a number of employees recently received a form 2013-14 P800 which was issued during our bulk 2013-14 End of Year reconciliation exercise.

"The 2013-14 P800 shows an incorrect overpayment or underpayment where the pay and tax shown on the P800 is incorrect and does not match that shown on their 2013-14 P60.

"The most common scenarios are where:

  • An incorrect overpayment is created as the 2013-14 reconciliation is based upon the Full Payment Submission (FPS) up to month 11 although the employment continued all year.
  • Where the year to date figures supplied are incorrect, for example where an employer reference changed in-year and the previous pay and tax is incorrectly included in the “year to date” (YTD) totals.
  • We have received an “Earlier Year Update” (EYU) and this is yet to be processed to the account.
  • There is a duplicate employment (often caused by differences in works numbers and other changes throughout the year)

"We are urgently investigating these cases and will look to resolve the matter in the next 6-8 weeks.

"We currently do not know the scale of the issue, but some large employers are involved, so several thousands of employees may be affected.

"Next Steps

"We are very sorry that some customers will receive an incorrect 2013-14 P800 tax calculation.

"We are urgently investigating these cases and will look to resolve the matter and issue a revised P800 to the employee in the next 6-8 weeks.

"Employers and their agents should not send any 2013-14 EYUs unless requested by us. We are aware that there are still some 2013-14 EYUs which we have yet to process to the relevant account.

"If an employee asks about a 2013-14 P800 which they think is incorrect, they should advise them:

  • Not to repay any underpayment shown on the P800
  • Not to cash any payable order they may have received
  • Employees will not be affected by the incorrect tax code as we will issue a revised P800 before Annual Coding."

[More on this story: HMRC apologises for P800 errors]

Related articles:

RTI: Time to tackle the snags

Tags:

Replies (25)

Please login or register to join the discussion.

By kenfrost
09th Oct 2014 10:13

Clusterf***!

Ladies and gentlemen there is only one word that can describe this:
 

CLUSTERf***! http://hmrcisshite.blogspot.co.uk/2014/10/hmrcs-rti-not-fit-for-purpose....

Thanks (2)
avatar
By BKD
09th Oct 2014 10:56

They haven't stopped issuing refunds at all

Only this morning I had 4 separate emails in my inbox from HMRC advising that I have been repaid GBP632.95.

Thanks (5)
Stepurhan
By stepurhan
09th Oct 2014 11:12

Also still being received

Actually got some in the bank this morning as well.

Is it actually only Cheap Accounting who have had their refunds stopped? For that matter, why is a named firm getting publicity for something that, even from their own words, is hearsay. If I told AccountingWeb that I "understood" HMRC were planning to employe chimpanzees to do data input, could I get free publicity without having that "understanding" fact-checked?

Thanks (7)
Replying to DanDLW:
By Elaine Clark
09th Oct 2014 11:40

Nope not just us :-)

stepurhan wrote:

Actually got some in the bank this morning as well.

Is it actually only Cheap Accounting who have had their refunds stopped? For that matter, why is a named firm getting publicity for something that, even from their own words, is hearsay. If I told AccountingWeb that I "understood" HMRC were planning to employe chimpanzees to do data input, could I get free publicity without having that "understanding" fact-checked?

Hi

Nope not just us :-)

Hopefully sharing the information I've been given can help the tax payers who would have received incorrect demands or refunds. It's rather more than hearsay :-)

More than happy to pass on details to media of those who can provide constructive commentary when called upon - they are always looking for good commentators.

Just ping me your details on a message and I’ll pass them along next time someone calls – hate to think you feel I am hogging the accountancy limelight :-) Hope that helps :-) If you're popping along to the Practice Excellence conference we could meet up & say hi :-) Would be nice to meet such an active AWeb member in person.

Thanks (0)
Replying to PZVF7MEAC:
Stepurhan
By stepurhan
09th Oct 2014 17:26

Hearsay

elainec100 wrote:
Hopefully sharing the information I've been given can help the tax payers who would have received incorrect demands or refunds. It's rather more than hearsay :-)
This is the bit I'm saying is hearsay.

Article wrote:
Elaine Clark, who runs the tax practice Cheap Accounting, said she understood that repayments for 2013/14 had been halted.
You stated you "understood" repayments had been halted. This is clearly not the case, but at least you only "understood" it to be the case rather than incorrectly stating it as fact. Regardless, since the more important part of the story is being reported in national newspapers (a Telegraph article is even included above) I am unsure why you are being given credit for revealing this. Possibly you could enlighten me.
Thanks (1)
Replying to Syd:
By Elaine Clark
09th Oct 2014 17:38

let's have a chat

stepurhan wrote:

elainec100 wrote:
Hopefully sharing the information I've been given can help the tax payers who would have received incorrect demands or refunds. It's rather more than hearsay :-)
This is the bit I'm saying is hearsay.

Article wrote:
Elaine Clark, who runs the tax practice Cheap Accounting, said she understood that repayments for 2013/14 had been halted.
You stated you "understood" repayments had been halted. This is clearly not the case, but at least you only "understood" it to be the case rather than incorrectly stating it as fact. Regardless, since the more important part of the story is being reported in national newspapers (a Telegraph article is even included above) I am unsure why you are being given credit for revealing this. Possibly you could enlighten me.

You'll have to help me here - could you enlighten me as to why I have been given the credit for revealing this :-) It's clearly the Telegraph that revealed it and if you read there story they give no credit :-) You do seem to have rather jumped to some incorrect assumptions but of course I am very sure you will enlighten me where once again you feel I am at fault :-) More than happy to have a discussion with you about it but it would be good to see a thread stay on track of the original story. Why don't I give you  a call and we can discuss any concerns that you have. More than happy to chat.
Thanks (0)
Replying to unearned luck:
Stepurhan
By stepurhan
10th Oct 2014 08:56

Quote is not credit

elainec100 wrote:
It's clearly the Telegraph that revealed it and if you read there story they give no credit :-)
You are right that the Telegraph story does quote you, and I will grant I did not notice that. My apologies for that. However, I cannot help noting that your name only appears very much in the context of "when this story broke, we spoke to an accountant". The quotes are fairly generic as well, any accountant would have said the same. 

The story is actually about a leaked e-mail. The story gives no indication that you leaked the e-mail, and it would be surprising if you had. To have been responsible for that you would have had to have worked for HMRC wouldn't you? That is generally a requirement for leaking internal e-mails from within any organisation. If you genuinely had direct involvement in an internal HMRC e-mail being leaked, please provide details of how you managed to do this.

So, in all honesty, it looks to me like the Telegraph received a leaked e-mail, and wanted to include quotes from accountants. For whatever reason, they had you on their contacts lists so you were one of the people they garnered quotes from. That is not the same as revealing the story, and the "revelation" here is still you passing on something that is already in the public domain from the Telegraph article. If I have misunderstood the chain of events, please do feel free to clarify.

[Comment moderated - Ed]

It will also come as no surprise that, given my feelings about how publicity is being gained here, I do NOT wish to be associated with your media contacts.

Thanks (4)
By Elaine Clark
09th Oct 2014 11:13

One employer - really?

On the basis of the info in the "leaked email" it'll have to be one damn big employer. The cynic in me asks if it could be a public sector employer - surely not HMRC?! Ha ha Anyway based on "what I heard" this was a bigger issue than just one employer. Time will tell of course. That said - I thought companies had to run a final submission to close the tax year down in RTI - so I'm a tad confused by the HMRC statement.

Thanks (2)
avatar
By Gav2013
09th Oct 2014 12:32

It's a bit stupid to 'fess up to receiving this error if HMRC are pointing out that it's because of the accounting firm in the first place.

Thanks (0)
Replying to lionofludesch:
By Elaine Clark
09th Oct 2014 12:43

confused?

Gav2013 wrote:

It's a bit stupid to 'fess up to receiving this error if HMRC are pointing out that it's because of the accounting firm in the first place.

The error is due to their (HMRC's) system - i.e. the year end reconciliation process. For the avoidance of any doubt HMRC is not pointing out that it's due to an accounting firm - ours or any others for that matter :-)
Thanks (1)
By kenny achampong
09th Oct 2014 13:09

P800

My guess is that they are only talking about the P800 rebates, which are nearly always wrong, mainly because they don't cross reference to SA, and so they dish out the rebates twice. But that is just one of a multitude of ridiculous errors I have seen...a lot going the other way too. It's been like that for a few years now, god only knows how much it's costing the country.

I have only had a few P800s for 2013-14, one was wrongly asking for £2,000, as it had accidentally left off the tax paid ! Not good at all.

Thanks (2)
avatar
By kellyanstee
09th Oct 2014 13:20

PAYE P800s

I had found this out this week too! We run the Payroll for a director of his own limited company (no other PAYE sources) and HMRC issued a P800 that had incorrect figures. Upon calling them HMRC advised me that they had made a mistake as the RTI info had doubled up for the year. Thank goodness that they can sort this out as my client was under the impression (correctly so) that we had been running his Payroll correctly. The underpayment of nearly £700 was written off. The only 'reason' that HMRC could provide me for this error occurring was because the client had changed from paying himself weekly to monthly - and apparently this may happen to many other clients. Another day, another dollar!

Thanks (1)
Andrew Goodall
By Andrew Goodall
09th Oct 2014 13:59

HMRC note to stakeholders now reproduced

HMRC has provided a copy of the note sent to stakeholders and I have updated the news story.

Thanks (3)
avatar
By dmmarler
09th Oct 2014 14:18

Assumptions

It seems whomsoever designed this HMRC system forgot the fundamental aspect of business - change.  Only public sector staff can safely assume that they will stay on the same payroll, month after month, and that all RTI submissions work perfectly, linking in the correct way, etc.  Assumptions were made for product testing before roll out (did they test?), and that the system could automatically churn out refunds without human intervention . . .  It might work like that in the software marketing blurb, but not in real life.  As we all know, all you need is a computer to make an even larger mess.

Thanks (1)
By Elaine Clark
09th Oct 2014 17:52

stepurhan

BTW - don't forget to pop me over your details so I can pass them onto media contacts looking for insights into news stories. :-) Thanks

Thanks (0)
Replying to unearned luck:
avatar
By ashbury
09th Oct 2014 19:20

Megastar!

Go girl! You were quoted on the tele news, papers section, last night too. What a star! That'll put the big boys in their place with all their PR megabucks :-D

Thanks (2)
avatar
By Sheepy306
09th Oct 2014 23:08

Fuss
Seems silly 2 active members on here squabbling over a question that was clearly directed at Mr Goodall, come on AWeb it was a valid question and a response will resolve the matter.

Thanks (2)
By ShirleyM
10th Oct 2014 07:59

Publicity

I often wonder why the 'big Four' and other large practices get so much publicity on here. I suppose it's because they get into the news a lot, but they don't actually help other AWeb members, as do Stepurhan, Steve Kesby, John Groganja, Euan McLennan, BKD, etc. and lots of other sole practitioners and small practices who give their help freely without thought of payment, or even free publicity.

I would expect the views of these contributers to be given priority on AWeb articles, as they are much respected helpers and contributers as fas as the readership is concerned. Promoting non-contributers will always appear to be a publicity promotion, except in this instance the media contacts did help get an accountant into the news. 

The news article was wrong, as it said all refunds had been stopped, which is clearly untrue, but no surprise there!

There must be a moral to this story ... somewhere!

Thanks (1)
Replying to Glennzy:
By slipknot08
06th Nov 2014 12:56

thanks Shirley - not!

ShirleyM wrote:

I often wonder why the 'big Four' and other large practices get so much publicity on here. I suppose it's because they get into the news a lot, but they don't actually help other AWeb members, as do Stepurhan, Steve Kesby, John Groganja, Euan McLennan, BKD, etc. and lots of other sole practitioners and small practices who give their help freely without thought of payment, or even free publicity.

I work for a large firm, and have always tried my best to answer technical queries on Aweb (where I am qualified to do so). Sometimes, I don't have time (because the big firms are big on recoveries and not having any unneccessary 'admin' type time, but I still try to give answers when I can: working for the big guys doesn't make us all monsters - and some of us have worked for smaller practices too, and still remember what it's like! I bet I'm not the only one either...

 

PS: totally with John S on the weird reaction to Elaine, too. She is good at raising her firm's profile? Well good for her and well done...

Thanks (1)
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
10th Oct 2014 11:08

How news and PR work

It seems this thread has become more about the merits of comments we quoted from Elaine Clark and her appearance in the national media. The key point of this article is what's actually happening to practitioners and taxpayers out there, not what Elaine Clark has to say about it. Could some of the negative comments being posted here prompted by jealousy at the high profile Elaine Clark enjoys?

Sheepy306 has pointed out that the original question yet to be answered was about why Elaine was quoted and her "understanding" that repayments had been stopped. Stepurhan is perfectly entitled to challenge us on that point and asked why she is a getting publicity for passing on hearsay. What is not appropriate is to start impugning her professional reputation as a result of her talking to journalists and being quoted in the press. The media works in an imperfect, fuzzy way that may not satisfy an accountant's evidentiary standards - so if you're going to try Elaine in the court of public opinion it is not fair to cite the evidence of how journalists have quoted her.

I'll try to illustrate this by explaining how we dealt with the story. The first point to remember is that it developed very quickly (thanks to the Telegraph splash). Speculation will inevitably flood in to fill the vacuum if HMRC or other official sources are not forthcoming. This what happened as we saw it:

The Telegraph got hold of an email that was quite widely circulated to stakeholders; the existence of RTI reconciliation errors was hardly news to anyone associated with AccountingWEB, but the admission of that fact by HMRC and the potential scale of the problem (overestimated in the Telegraph's report) were newsworthy, as was the suggestion that repayments had been stopped.As usual, our first port of call was the HMRC press office. On this occasion we were unable to get any reply on several different phone numbers.Elaine Clark had already blogged and tweeted about the issue and was quoted in several papers, so we gave her a call too and reported that she "understood" repayments had been stopped.As soon as we heard back from HMRC that repayment processes were "continuing as normal", we updated the story. Please note, too, that this neither confirms nor denies that there had been any suspension of repayments. Such is the level of sensitivity (and poor internal information?) that we may struggle to ever get a definitive answer to what happened there - but we have to put our hands up and admit that the Telegraph report that it had was a trigger for giving the story such prominence.An hour or two later HMRC sent us a copy of the supposedly "leaked" stakeholder email, confirming that HMRC did not know the full scale of the problem and admitting that "several thousand" employees might be affected.

This message confirmed suspicions we have been harbouring for the best part of the year about reconciliation problems within the RTI system, so even if our initial response was to chase a press report, the underlying reality merited this attention - which we have followed up with a further story on HMRC's public apology.

Elaine Clark has built up a prominent profile within the profession because she uses social media so effectively to share and discuss issues that matter to her clients and prospects. She does this as a deliberate marketing strategy for CheapAccounting.co.uk and puts a lot of effort into it - for which, incidentally the firm has been recognised as a nominee for our Practice Excellence Award for innovative firms.

That is why she is quoted more often in the general press than other AccountingWEB members. Until you start competing with her on that level, you may as well get used to it. But it also raises the risk that if you stick your head above the parapet, you’re likely to suffer the occasional pot shot.

I would also like to challenge ShirleyM’s comment that AccountingWEB neglects the contributions from the people who offer their advice on the site. This is a very important part of our regular content, and such articles appear on almost a weekly basis:

RTI: Time to tackle the snags

Email templates for accountants

Auto enrolment case study: Woods Squared

Scottish independence: The accountant’s perspective

7 top calculator memories

As well as getting ideas and comments from AccountingWEB members we also read the national press and sometimes pick up things and contacts that they report too. Occasionally we will report the existence of allegations that we cannot directly substantiate but think that the overall story did merit our immediate attention in this case.

Thanks (2)
Replying to Accountant A:
By kenfrost
11th Oct 2014 08:55

Well said John!

Elaine has worked hard to build up her successful business, she is a consummate professional and is an effective user of social media.

Some in our profession could learn a lot from her, wrt professionalism, courtesy and effective use of social media if they were able to dispense with the green jealousy bug that seems to have infected them.

Thanks (2)
By ShirleyM
10th Oct 2014 11:24

Did I say that?????

I would also like to challenge ShirleyM’s comment that AccountingWEB neglects the contributions from the people who offer their advice on the site.

I thought I questioned (and indeed answered) why some non-contributers get publicity in front page articles. I certainly did not say that others are neglected. I am sorry if this comes across as me being a moaner, as you have described some AWebbers.

Thanks (0)
avatar
By kellyanstee
10th Oct 2014 14:18

Sad Times

I find it quite sad how all these professionals are arguing the toss over PR....!! I've probably just put myself in the firing line for such a comment, but life's too short to be getting all worked up over this surely!? HAPPY FRIDAY!

Thanks (1)
avatar
By AndrewV12
11th Oct 2014 10:23

Paye related

It appears that its mainly on Paye refunds that have been effected, though I had to wait ages for a clients large CIS refund to be released by HMRC.

Thanks (0)
avatar
By caleycasual
04th Nov 2014 23:37

I got one last week
Stating I am due a refund. In my case they have used my month 11 figures.

Thanks (0)