P800s

I have recently received 3 P800s to review.  

The treatment of charitable donations appears to be consistently incorrect.  Personally I would treat charitable donations as an extension to the basic rate band but would accept that they could be a deduction from income but the basic rate tax deducted at source then needs to be added back to the tax payable.

All of the P800s treat charitable donations as a deduction from income without a corresponding clawback of basic rate tax relief, ie understating the income tax liability.  The sums involved are fairly trivial but it is a consistent error.

The other interesting point is that all the P800s included basic rate band extensions.  I only spotted by checking the band against the rates for the year and there is no breakdown or explanation given as to what has been adjusted or why.  The sensible guess is pension contributions but someone without tax training is not going to be able to spot the inclusion let alone check that it is correct.

The first page does ask the taxpayer to check the calculation, which would be tricky given the error on the treatment of charitable donations and no information on the basic rate band extension, and tell the Revenue if it is wrong.  The slight problem is if having spotted the calculation is wrong there are no contact details, address or telephone number, to let HMRC know.

Surely what is needed is a list of items that have been adjusted for:

Benefits in kind reported by your employer

Savings income

Charitable donations

Pension contributions made from net pay

with a request for the taxpayer to let HMRC know if they are incorrect.