MSE News: Hundreds of thousands could miss out on tax rebate

Mikeyorks

chrismac1 wrote: »

6 million errors. 6 million. How much of an exagerration is that, exactly?

Whose errors?

Break them down to HMRC / employer / employee?

Pennywise

For once, I think I have to defend HMRC this time. (Regulars will know I don't usually defend them!).

Whenever there's any suggestion of "big brother" centralised databases, everyone's up in arms about civil liberties, data protection, etc., yet somehow we all expect HMRC and DWP to somehow receive telepathic messages when we move house!

OK, HMRC could do A LOT more to publicise the fact that people should tell them when they move. A dedicated phone line and office address would be helpful as otherwise a lot of people won't have a clue what number to phone or where to write to. But a lot of people DO know their tax office address and phone number and still forget/can't be bothered to tell them.

I think they should also make it clear that you have to tell every relevant department within HMRC, i.e. not only your tax office, but the NIC office, the tax credit office, VAT and Payroll if applicable, etc - it's quite common for people to tell one office and assume that it filters through all other departments - it doesn't - perhaps it should?

It's not just HMRC and DWP though. I have to do ID checks for new clients and am amazed at the amount of passports and driving licences still registered to long past addresses.

People really have to start taking responsibilty for themselves.

As other threads have shown, too many people assume their tax affairs are in order when they aren't - most average people are perfectly capable of spending a couple of hours online to try to work out what's right and what isn't - people spend hours shopping around to save a few pounds, but completely ignore the hundreds/thousands in tax.

If there's one good thing to come out of the HMRC PAYE coding fiasco and now this latest publicity re addresses, it's the publicity to make people think about their tax and show a bit of interest! Perhaps instead of showing plumbers under sinks in TV adverts re tax evasion, they should be putting out TV adverts telling people the basics about their tax?

Mikeyorks

BAA1 wrote: »

I'm not sure which figures are accurate, but a BBC news article from January this year quotes :.

My figures are accurate ..... up to 2010-11. The P2 entire issue has hardly fluctuated from a total of 20M annually over the last 10 years. Until, that is, they brought in the new PAYE system which issued P2s for the first time in Feb / Mar of this year.

The BBC / CIOT quote you reference is wholly inaccurate. The expectation - because of revised selection criteria on the new PAYE system was for the bulk issue to reduce to 13M items. In the event 26M were produced. The majority of this excess were not issued. Which explains why my P2, normally delivered end Jan - was 2 months later as they attempted to sort the wheat from the chaff. The entity of the problem and the curative action was discussed at an internal meeting at which a representative of CIOT was present. So there's little excuse for them getting it wrong ...... says something about the profession I guess? The minutes of that meeting aren't in the public domain any more. But the Dept report has a stripped down version of it :-

A significant control issue has arisen since the implementation of the National Insurance and PAYE Service (NPS) in July 2009. NPS, which uses a single record for each customer, is an important part of our modernisation of the PAYE system. Although data was successfully migrated from the old system, the quality of pre-NPS data and the strengthened validation on NPS have combined to create more exceptions and identify more data anomalies than were forecast.
As a result, the number of taxpayer Annual Notices of Coding (P2s) generated by the system almost doubled in January 2010 from the predicted 13 million. Data inconsistencies and other factors meant that a proportion of P2s were generated incorrectly. As soon as this became evident, a recovery programme was put in place to ensure that only correct P2s were issued to taxpayers and the correct codes were issued to employers to enable them to revise employee codes in time for the start of the new tax year (P9s)

"Most" tax payers would not have received a P2 since there are approx 30.5 million income tax payers (according to HMRC figures)

The figure you quote is inaccurate for the validity you're attempting to give it. The 30.5M are individual taxpayers. And accordingly includes some 5M who are SA only and would never get a P2 (as well as some 4M who are both SA and PAYE)


The net result is there are some 25M pure PAYE taxpayers ..... who received some 20m P2s between them to the start of this year. Even if we take the revised P2 issue from the new system (13M bulk + est 4M in-year) ...... most people on PAYE will continue to get a P2 every year.

So there's little excuse for ignoring HMRC at an address change.

MSE_Martin

Hi folks

Just on one element of this date.

There is no suggestion from us that HMRC has done anything wrong with people's addresses

The point here is there is the biggest ever system of rebates being sent out and 100,000s may miss out as people having told it of address changes and we want to change that.

As for 'picking on HMRC' I actually think we've been very moderate in our stories - most of the press slam this all as an HMRC fault as we explain in the main www.taxcodecalculator.com guide this is a hybrid of HMRC errors and HMRC's new system discovering errors in the system (many of which eminate from incorrect notifications of payroll changes from employers/ees)

Yet to say HMRC hasn't blundered isn't right.

Jo-Jo-83

Although im currently a stay at home mum, each and every time i move house (which has been a few times over tha past few years unfortunatly) i telephone the HMRC to update my daughters child benefit address. If i didnt do this, i wouldnt have proof of address for my daughter for school etc, so it is just as important to contact HMRC, whatever the issue, and update your address, telephone number etc. I would say to make sure they repeat back to you, as i have had it where they said they updated it, then when a letter didnt turn up, i had to contact them, and they have also asked if i would like them to update the other files, which saves sitting in lots of queues, as they dont automatically do it.

Mikeyorks

MSE_Martin wrote: »

Yet to say HMRC hasn't blundered isn't right.

Fully accepted, Martin.

But :

HMRC's new system discovering errors in the system (many of which eminate from incorrect notifications of payroll changes from employers/ees)

............... the essential balance created by the italicised portion never quite makes the 'News' items? As this is internal to your website and not attempting to sell papers on the street .... a bit of balance goes a long way in these icy conditions.

John_Pierpoint

Does the new HMRC system allow for the possibility that a tax payer may have two identities and two addresses?

I have had letters addressed to me as the dead person, supposedly still alive.
I have supposedly been sent letters, unfortunately addressed to me BUT sent to my dead relative's earthly address.

Ah well I'm currently waiting to be sent a filled in version of form P254 ("voluntary" tax payment) it has both addresses on it.

I wonder which address will be sent that?

Anyone got a coin to toss?

Seriously though, if correspondence was answered within say 7 days, BOTH parties in the correspondence would be able to remember what they said last time and efficiency would improve by leaps and bounds.
Modern life moves that fast!

PW88

Even if you haven't moved you may not get your rebate. If HMRC make a typo when making the payment (as they did in my wife's case) when the money if returned to them by the bank they make no effort to contact you to check that they have the correct bank details (in our case they HAD the correct details, but made a mistake). Check that the bank details are correct in the letter they send to tell you that the rebate has been paid and if it is wrong contact them ASAP

System

Mikeyorks wrote: »

My figures are accurate ..... up to 2010-11. The P2 entire issue has hardly fluctuated from a total of 20M annually over the last 10 years. Until, that is, they brought in the new PAYE system which issued P2s for the first time in Feb / Mar of this year.

The BBC / CIOT quote you reference is wholly inaccurate. The expectation - because of revised selection criteria on the new PAYE system was for the bulk issue to reduce to 13M items. In the event 26M were produced.
....

But the Dept report has a stripped down version of it :-

....


The figure you quote is inaccurate for the validity you're attempting to give it. The 30.5M are individual taxpayers. And accordingly includes some 5M who are SA only and would never get a P2 (as well as some 4M who are both SA and PAYE)


The net result is there are some 25M pure PAYE taxpayers ..... who received some 20m P2s between them to the start of this year. Even if we take the revised P2 issue from the new system (13M bulk + est 4M in-year) ...... most people on PAYE will continue to get a P2 every year.

Hi Mike

Many thanks for posting this additional info.

For our info, could you post links to the various statistics you have used so that we can reference more accurate numbers in future.

I have highlighted the info in your post that I am particularly interested in.

Cheers

Mikeyorks

BAA1 wrote: »

For our info, could you post links to the various statistics you have used so that we can reference more accurate numbers in future.

20M annually over the last 10 years. .......... most of this is based on personal knowledge of large data centres. In particular where there's major impact on outsourcing / machinery and postal services. They're not figures HMRC would consider they need to publish so, in recent years they only creep out at the edges. Such as here where they discuss the change to the personalised P2(New) :-

http://www.hmrc.gov.uk/workingtogether/publications/wt-23.htm#b

But the 20M referenced has been broadly constant throughout the life of the old (COP) PAYE system (as the programmed criteria hasn't varied) and it's initial split among 12 data centres. Before these were closed as mainframes reduced dramatically in size and they were all shoehorned into the 2 x existing Accounts Offices. The P2 production was outsourced at that point .... but has been brought back in house as outsourcing (and the need to move data ex HMRC) no longer fits with new security requirements, following the data discs loss.

bulk issue to reduce to 13M items. In the event 26M were produced.

Paras 6.7 and 6.8 of the HMRC accounts, below (large file), for 09-10 cover that. It was covered in more detail in other documents in Mar / April that seem to have now disappeared.

http://www.hmrc.gov.uk/about/hmrc-accs-0910.pdf

Dept report

....... is the document above that I was referring to.

some 5M who are SA only and would never get a P2 (as well as some 4M who are both SA and PAYE)

...... again mainly personal knowledge as HMRC stats tend to bundle SA and PAYE under Income Tax as that's how they account for it. Whilst CGT is split out of IT ..... it's not fully trustworthy as it's done on algorithm from the totals within SA.
When SA was introduced over the 2 years '97 and '98 the database totalled just over 10M. Split more or less equally between those who were pure SA and those who were in because they were PAYE and either HR or pensioners who couldn't pay under PAYE. in the intervening years the SA element has remained fairly stable but the PAYE has reduced to circa 4M as a number of pensioners have been removed and a lot of 40% taxpayers whose affairs are otherwise simple have also been taken out.