2017: HMRC’s “missing correspondence, incorrect PAYE codes, inaccurate tax calculations”

“Most (elderly people) do not think of checking the statements and pay up whatever is asked” (accountant)’.

AccountingWEB members (accounting and finance professionals in the UK) have ‘seen it all in their time’, but some believe that HMRC’s errors are becoming more frequent. Their May article was accompanied by the picture on the left. Read on here.

Self Assessment: service availability and issues (government website)

A typical notice received by TaxAgents  showed that among the issues affecting individuals and agents using the Self Assessment Service was the unavailability of various services. Some customers were experiencing technical difficulties and delayed submission responses. See ‘Planned downtime’ for the majority of National Insurance and PAYE Services, 13 to 15 October 2017.

Giles Mooney of Absolute Accounting Software, a software provider, said commercial software providers had to follow HMRC’s specifications.  An “insanely complicated set of rules” were to blame for the inability of the HMRC coders to solve the problem before the end of the tax year.

He explained that the software is not applying the 0% savings starting rate to up to £5,000 of the savings income of the taxpayers in the first income band. For example, someone with a pension income of £11,000 and interest income of £26,000 should pay tax of £4,000 for 2016-17. But tax computation software used by HMRC’s system would incorrectly calculate the tax as £5,000.

The second group of taxpayers would lose up to £280 because the software incorrectly allocates the £5,000 dividend tax allowance in a way that results in too many dividends being taxed at the 45p additional rate.

Software glitches are putting thousands of people at risk of paying hundreds of pounds too much tax next year, as programmers struggle to cope with an increasingly complex tax system, according to the Financial Times.

 

 

 

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