HMRC gets P800 calculations wrong
HMRC is sending out P800 tax calculations to taxpayers that do not follow the legal requirement to apply allowances to the taxpayer’s advantage.
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The problem is that IT cannot get it right
Too many low level allowances
It needs a human to prioritise
You've hit one of my many raw nerves with this article, John.
A lot of these problems go back to the days of Osborne - whose eventual epitaph should read "Never told the truth when the opportunity to mis-lead arose".
Do you remember the lead-up to RTI when we were told that it represented the death of the P45 or, indeed, that it would massively reduce the number of P800s issued each year (hopefully to zero)?
About as 'truthful' as the claim that MTD would bring an end to year-end tax returns!
And yes, of course, Rebecca is right to call for independent oversight on tax software specifications ... but it's been getting steadily worse for 10years (and this is now accelerating) - not helped by the near dismemberment of SDST (HMRC's Software Developers Support Team) that has turned them into a reactive mouthpiece instead of the co-operative function that sought involvement at the earliest possible stages (i.e. post policy but prior to draft specifications).
I could go on - but don't want to sound like a Jeremiah or, worse, a Cassandra!
"The HMRC PAYE team responsible for the P800 process is aware that the allocation of reliefs and allowances is not always in the taxpayer’s best interests, as set out in legislation, but are not in a position to update the logic, the department said.
HMRC has a review process in place to find affected calculations and recalculating them manually, it added."
So that's all right, then! Not.
HMRC lost a number of their IT staff (IR35 issues?) and are no longer competent to perform the tasks (duties?) that are their responsibility. Perhaps they should use third parties - HMG does in so very many cases. The software companies may strike lucky and be paid very handsomely.
A laudible idea, but would result in more sticking plasters on an already broken system. HMRC need to engage software engineers to go back to the drawing board and build a unified system from the ground up if they want to have a hope in hell of a digital future that works.
How on earth is it possible that one HMRC system for calculation of liabilities (PAYE/P800) does not follow the SA system computation that all our 3rd party software has to follow for us to be able to submit returns for clients!? [Rhetorical question, as I realise that the answer is "All HMRC systems are rubbish, none of them interact in meaningful fashion, and MTDIT is on target to be a complete omnishambles"]