MSE News: 3.5m to get tax refunds but 1.6m to be asked for more

chrismac1

It is a routine part of the reconciliation process, agreed. However, there are a few simple things HMRC could do which in my view would greatly reduce the problem, without radical changes to recruitment policy and so on.

Tax coding 810L - !!!!!! does this mean to 80% of the UK population? Nada. Instead, let's have 8,105. Let's make it clear 8,105 is the tax-free pay, so if someone gets a coding notice of 6,105 they know HMRC thinks they have 2,000 of taxable benefits or whatever.

And yes I know there are lots of notes with the coding notices. But I still get probably 5 queries per month on these notices from my client base. This includes, for example, a partner in a large architects' practice who can understand complex technical drawings but cannot fathom 80% of the post he gets from HMRC.

People who work for HMRC are too enmeshed in the whole culture to understand just how few people out there have a clue about the majority of the stuff they send out. The HMRC website is pants too. I have numerous links saved on my PC just so I can send clients directly to the correct HMRC page because I know I am saving them lots and lots of fruitless searching time.

AirlieBird

chrismac1 wrote: »

The HMRC website is pants too. I have numerous links saved on my PC just so I can send clients directly to the correct HMRC page because I know I am saving them lots and lots of fruitless searching time.

There is a lot of useful information on the website, but I agree that the navigation and site design could be much improved. But it's better than what it's going to be. I worry about how much information will be lost and how difficult it will be to find next year when every government dept closes their website and migrates to the single gov.uk website, of which the beta version looks very dumbed down and designed to be read by 5 year olds.

Pennywise

TM1976 wrote: »

The reason this happens is because it's not possible to say for sure how much tax someone should have paid until the tax year has finished. This has to happen every year, the fact that it does happen just shows that HMR&C is doing what they are supposed to do.

I deal with HMR&C a lot and I have a lot of gripes about the way they do things but this isn't an error it's just a part of the process. Beats me why MSE constantly try to knock HMR&C on this issue.

Agreed, but a lot of the over/under payments wouldn't arise if HMRC acted on P45/P46s and other information given to them and issued correct coding notices during the year.

I've got a number of clients with 2 or more sources of income and it's like pulling teeth to get them to issue the right coding notices, even when I've told them exactly what codes are required for each source of income and given them estimates of income from each etc. It's particularly bad when total income exceeds the HR threshold but each source of income is within the BR band - HMRC systems just can't cope and it needs manual intervention which means you need an HMRC worker who undertands and knows how to do the manual over-ride to the PAYE code - far too many can't comprehend it and get it woefully wrong. It usually takes a few attempts to get it right and then, come January, they issue new codes for the subsequent year and it's all wrong again. Pure madness!

Same with employees/directors who have expenses reimbursements to declare, but which are zeroised by expenses relief claims. HMRC ignore the SA return when they issue the PAYE codes, so they code out the expenses but don't code back in the corresponding claim for relief, thus more phone calls and letters to them to put it right. And again, this happens every single year! There's just no mechanism for such information being carried forward to following years, so computer issues a wrong code again automatically.

Another classic example of their incompetence is the increase in mileage allowance from 40p to 45p. Common sense would have dictated that they should increase the amount in the PAYE coding notice to accommodate this, i.e. if the code includes the prior year allowance (as is normal), for £1000 then the codes should have been automatically uplifted to allow for £1125 under the new increased rate. HMRC didn't do it. That is so basic that it's unbelievable it wasn't programmed in to their systems.

And another, despite the state pension age for women being increased, HMRC systems are still "assuming" that a state pension is received from the 60th birthday and automatically adjusting the PAYE according. Again, nothing but poor programming of their systems.

I agree with Chrismac, the RTI is going to be a complete and utter foul up unless they've got some major software re-writes going on in the background. The systems shut down twice a year is a major problem and will cause serious difficulties if HMRC don't get their act together and provide continuity of services for when RTI comes in. This year, there were employers who couldn't produce payslips using HMRC systems at the start of April because HMRC was down and they couldn't file the end of year P35, which in turn meant the HMRC payroll couldn't be rolled over into the new tax year which badly affected (especially weekly pay), required to pay staff at the start of April. If that kind of thing is allowed to happen under RTI, it will end up a complete fiasco. A five day shutdown is utterly ridiculous - a day or half a day is bad enough and wouldn't be tolerated in a business environment.

[Deleted User]

I got 2 refunds without asking for them which is great news for me. They must be trawling through everybody's taxes to see what pennies they can squeeze out of us. But at least they did do the proper thing and give me what I should have had in the first place. A pity they didn't spend more time trawling through corporate accounts and making the biggest companies pay their fair share of tax.

molerat

I got a cheque for just shy of £1800 for 09/10

Rupert_Bear

I completed my tax return online for years 11/12 and have just checked to see I will receive a refund of £132.00. Not a lot but every little does really help.