The ICAEW has reported that errors are being found in HMRC’s annual reconciliation of taxpayers’ PAYE records for 2017/18.
HMRC has commenced issuing P800 tax calculations and PA302 simple assessments for 2017/18 as part of its annual reconciliation process for individuals who receive income under PAYE. The ICAEW reports that it has started to receive details of incorrect calculations being issued. Accordingly to the ICAEW reports these involve the use of estimated figures, and data from employer RTI submissions not feeding through correctly to the employee record.
There are also reports of duplicate calculations being issued by the self-assessment and NPS (the National Insurance and PAYE service who issue PA302 simple assessments) systems to individuals who file self-assessment returns voluntarily. HMRC has asked taxpayers and their agents to check that registration for self-assessment is in place before filing a tax return, advising that this type of error can be avoided by re-registering where it is not.
This will not stop duplicate calculations being issued tor the other group of taxpayers affected here. It seems that where a taxpayer in self-assessment (because they are self-employed or have income from property) who has not had a PAYE source of income for several years starts receiving PAYE income, such as an employment income or a pension, HMRC’s systems are not linking the new PAYE record to the self-assessment record and duplicate calculations are being issued.
It appears to be standard HMRC practice to use estimated figures for P800/PA302 calculations where actual figures are not available. These estimates may be based on the last self-assessment tax return submitted to HMRC, or a figure provided to HMRC by the taxpayer or their agent. Either way the figures may well be out of date. Estimates are being used for items such as:
- Interest or dividend income of less than £10,000
- Rental or other income of less than £2,500
- Pension contributions
- Employment expenses of less than £2,500
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