HMRC are undertaking their annual reconciliation of PAYE records and started the process of sending out P800 tax calculations and PA302 simple assessments in June. This process finalises the income tax liability for individuals under PAYE who are not expected to complete a tax return and HMRC expect it to be completed by the end of November 2019.
Clients should look out for the calculations and simple assessments. However, HMRC can and do make mistakes, so rather than assume that HMRC’s figures are correct, they should be checked carefully. The ICAEW have highlighted the following items where, historically, errors have been common:
- employment and pension income and tax deducted, including checking for omissions and duplications;
- other taxable income, such as rental income or dividend income below the threshold for needing to file a self-assessment tax return;
- employment expenses; and
- allowances, such as the marriage allowance.
HMRC estimate that 10% of individuals will have overpaid tax and 5% of individuals will have underpaid tax. Repayments for clients who have overpaid tax can be triggered from their personal tax account if they do not want to wait for HMRC to issue the refund, which may take up to two months. Where tax is owing, HMRC will either notify the individual that they will collect the underpaid via their tax code or, where this is not possible, issue a PA302 simple assessment, which must be paid by 31 January 2020.
Individuals registered for self-assessment who submit a tax return should not receive a PAYE calculation – where this is issued in error, you should contact HMRC to correct the situation.
Written by the Tax Advice Network