The Phantom Menace

It seems that there are "phantoms" within the machine, or rather that HMRC are issuing P800T forms showing overpayments of tax after taxpayers have already claimed and received repayments.

AccountingWEB have received a number of reports of "phantom P800T" forms being issued.

HMRC said that it had isolated the issue behind the mis-issued refund notices and was working to resolve it:

“Most customers’ tax affairs are automatically and correctly worked out by our systems. A minority of customers who are in both SA and PAYE get their affairs worked out by both systems, incorrectly, and we regret the inconvenience this causes them and their agents.” 

According to Tax faculty member Shirley Martin, the issue goes back to 2010:

“One of the processes is where NPS should be notified automatically when an SA record is set up/closed down (SAM100090). The process is supposed to set the SA indicator on the NPS record. The purpose of the indicator is to tell NPS that a P800T is not required because the tax will be settled  through SA (PAYE 93032).

The first cases of SA taxpayers getting refunds from NPS were attributed to a reported broken link between SA and NPS.”

HMRC has been aware of the problem for more than two years. Indeed it was reported by a loyal reader on this site in 2011:

"OK what we are experiencing is HMRC issuing unsolicitored P800T tax calculations for 10-11 when a 10-11 SATR has already been lodged! Clients are getting two repayments and some getting refunds when they owe tax "computer says PAYE and SA records not linked". FFS!"

However, the issue has yet to be fixed.

Tax does have to be taxing.

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Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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