The PAYE code is not up to date, does not contain all relevant details, or is otherwise incorrect.
The code contains estimates of items such as other income, benefits-in-kind, pension contributions or gift aid donations, but the actual figures are different from the estimates.
The taxpayer has several jobs or pensions taxed under PAYE or has moved jobs frequently and had gaps between periods of work.
The taxpayer has started drawing a state pension during the year or has had periods claiming other taxable state benefits such as Job Seekers Allowance, contributions based Employment and Support Allowance or Bereavement Benefit.
The code contains incorrect figures for underpaid tax from a previous year.
The employer has made an error in operating PAYE.
HMRC has made an error.
What to do if you or your client gets a P800It is very important to check the P800 calculation. The under- or overpayment might be wrong.Errors or omissions should be reported to HMRC. This applies even if there is an overpayment, as there is an obligation to point out errors.
We have received three today all of which are inherently incorrect.
- Taxpayer advised of a refund due of £1,500, based on previous years return. Refund was in respect of taxed interest from a portfolio of investments. The income for 2015/16 is significantly lower.
- Taxpayer advised of repayment based on Pension income only. Tax Return will include his self employed earnings which are continuing.
- Tax payer advised of a repayment based on salaried earnings only. He is also self-employed and these earnings are yet to be reported.
Wonder how many of the 6 million calculations will be incorrect.
Bigbean, HMRC applies a tolerance when reconciling PAYE records and will not issue a calculation if the tolerance applies. HMRC’s PAYE manual 93075 gives the detail of how the tolerance operates. The amount of the tolerance is information withheld from the manual but we understand that the current amount is £50.
Another problem which can occur is on R40 cases. For the past two years I have had a P800 issued for a client showing a tax underpayment on gift aid. Her PAYE income from pensions is less than the personal allowance but she has at least £15,000 of interest and dividend income, the tax on which far exceeds the tax due on gift aid. She is in a repayment, not a payment, position.This is a case where the information used to complete the P800 is incomplete and gives a misleading position. I have tried to stop the P800 being issued but you can't. Incidentally the calculation sent to me has no address or telephone number to contact. Thank goodness for the agent line!
I suspect that Keith's problem may be the tip of a large iceberg. We have had problems with HMRC both in the operation of the RTI system where they cannot seem to allocate payments correctly and where they misinterpret the information they have and then misinform other .Gov departments such as the Tax Credit people who then snatch back credits which are due on the basis of wrong information supplied by the RTI people. Odd comments by HMRC staff suggest that this is a not uncommon problem as there is a long backlog to get such problems sorted. Is anyone surprised?
3 of our 500 employees have already received large tax bills for underpaid tax in 2015-16, which is incorrect. These 3 staff have only 1 employment and the tax shown on their P800 is about half of what we have deducted and submitted to HMRC on time each month under RTI reporting & monthly payment by BACS. As the FD I tired to find out the cause of the problem by phone, but typical unhelpful nothing can be done. Was advised that the 3 staff members must write personally with a copy of their P60! I have faxed all 3 cases to HMRC on Friday 8 July and will see how long it takes them to respond. These 3 are all factory workers earning in the region of £18 to 20,000 p.a. and they are scared to death to receive a tax notification that they owe in the region of £600 to £1000 each. When will HMRC set up some kind of checking system before just sending our incorrect calculations?? Does anyone else have similar cases so far please?