HMRC left red faced after P800 error


HMRC messes up with P800’s

HMRC no longer issues income tax repayments, now that an email was leaked and exposed. The information held was that of the end of year tax reconciliations relevant to thousands of taxpayers, and how these might have been wrongly calculated. A HMRC spokesperson said that everything is moving along as normal however. This may be the case, but the main point is that the email in question refers to the fact that several major employers were involved. This means that the number of employers affected would be in the thousands at least.

It seems that repayments for 2013/14 had been halted as a result. This is a concern because RTI was put in place to sort out issues, not create them. It was there to make sure payroll information was up to date and that the right tax was being paid by all. So where have the errors come from? The system itself must be flawed.

RTI had been invested in by many employers, who were putting large amounts of data in the system. HMRC it seems will need to step up and act quickly to sort out where the problem lay.

HMRC have stated that tens of thousands will be affected but have since admitted that they have no clue about the true scale of this problem.

A spokesperson for HMRC claimed that the incorrect documents were not actually demands but were in fact tax summaries. They made it clear that nobody has been told to pay tax over the issue.

HMRC went on to say that most of the errors occurred because an employer didn’t make a concluding payment statement for the last tax year. This meant that their records were unfinished despite notices for those submissions to be made. They went on to apologise and that they would revise the calculations in the coming weeks.

The HMRC note to stakeholders

HMRC produced a note that was sent to stakeholders such as employers, professional bodies and other business groups. Here are some key points taken from that note:

• It explains how they were aware that some employees had received a form 2013-14 P800 during an end of year reconciliation exercise.
• How the 2013-14 P800 displays an improper over or underpayment and doesn’t match that shown on their P60.
• That they are directly looking into these cases and seeking to sort out the matter within 6-8 weeks.
• That “several thousands of employees may be affected.”
• How very sorry they are that certain customers will obtain the wrong 2013-14 P800 tax calculation.
• That an employer should not send 2013-14 EYUs unless they are specifically asked for by HMRC. This is because they are aware of some 2013-14 EYUs that have yet to be placed into the applicable accounts.
• If any questions should arise from an employee about the 2013-14 P800 that they think is wrong, then the advice given to the employer in this situation is as follows:
• Do not repay an underpayment that is shown on the P800
• Don’t cash any payable order that might have been acquired
• Employees won’t be affected by the tax code errors, because HMRC will be issuing a reviewed P800 before the Annual Coding

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