Mysterious change in tax owed for 21/22: from £3.65 refund to £982.60 owing with no explanation 5 February at 10:09AM in Cutting tax 16 replies 802 views

Dazed_and_C0nfused

FatherTireseus said:

purdyoaten2 said:

This could cause confusion:

(*Yes, I know I can submit the EIS forms direct to HMRC for a refund without a tax return, but I submitted my 2021/22 tax return before one small value EIS certificate was received.  When I did get it, I sent that off separately in September 2022.  Still waiting to hear from HMRC on that score, five months later.  So I have worked out it's easier to submit all my EIS claims in my tax return as that gets processed more quickly).  

Submitting a return before subsequently sending in further separate documentation is really not the thing to do. You should have amended the return. As it sits, the final submission is not correct. You still can amend it and should. 

Quite a bit to be cleared up here! 

I would quite happily have amended my tax return to do this.  However in a previous year I had amended a previous year's tax return to change the gift aid figures and subsequently got a letter from HMRC telling me I couldn't amend gift aid in a tax return, so please change it back, which I did.

So I thought hmm, I'll check with HMRC about EIS forms.  So I duly rang the HMRC help desk and was told no, you can't amend a tax return to add in EIS certificates which you received after the tax return was submitted.  You have to post them in.  So I did what I was advised to do.

It's not impossible that I was advised incorrectly, though.....

I wonder if you were trying to amend a very specific Gift Aid claim which can only be made on the original return?

Carry back to the previous tax year?

FatherTireseus

Dazed_and_C0nfused said:

I wonder if you were trying to amend a very specific Gift Aid claim which can only be made on the original return?

Carry back to the previous tax year?

Yes it was...I know now that's not possible!

FatherTireseus

Well, after an hour or so on the phone to HMRC today I think I've got it sorted.  As D&C rightly suggested, the problem seemed to be that my self assessment data had been replaced by the PAYE data.  (As the advisor I spoke to said, there are two databases and the connection between the two seemed to have been lost in this instance).  Tax for 21/22 has been updated to show the self assessment figure and the tax coding for 23/24 is being updated to remove the underpaid tax.

No-one could tell me why it had happened (I've submitted self assessments before without issue, albeit ones in the past probably haven't been quite as complicated as this one).  But hopefully it's sorted now.

Many thanks for the replies.

purdyoaten2

I have heard of this happening a few times now. In all of the cases a P800 has been issued even though a return has been completed by the taxpayer but only when there has been no notice to file issued i.e. the taxpayer has chosen to file anyway. 

It’s almost as, because that there has been no notice to file, HMRC automatically proceed with a P800 without checking that a self-assessment return has been filed voluntarily. 

MDMD

purdyoaten2 said:

I have heard of this happening a few times now. In all of the cases a P800 has been issued even though a return has been completed by the taxpayer but only when there has been no notice to file issued i.e. the taxpayer has chosen to file anyway. 

It’s almost as, because that there has been no notice to file, HMRC automatically proceed with a P800 without checking that a self-assessment return has been filed voluntarily. 

It’s to do with the “indicators” set on the record. When there is no notice to file issued, the “live SA” indicator is unset

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye103065

For some reason (maybe timing) the link was not reset with the return being filed. What then happens is the PAYE System (NPS in HMRC jargon) looks to “reconcile” the year, sees that “live SA” is not set, and then recalculate the year.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye93005

badmemory

I have recently discovered that there can actually be benefits to letting them do simple assessment rather than filing self assessment.  Although I do look forward to them ever getting it right.  They never sent my 20-21 assessment & it appears that I cannot be charged penalties.  Although I did pay it anyway with my 21-22 assessment (yes they did send that) it turns out I was 20p out.  I was told to just add the 20p to the 22-23 assessment, which I will probably have to query too.  It was so much easier doing self assessment.

The reason for my 20p underpayment was interesting.  With self assessment one income £12000.50, another income 600.50, total that they base the tax on is £12000+£600 as they drop the pennies.  With simple assessment they add them so they base the tax on £18001.  Hence the 20p.  Nothing like a little bit of tax trivia!