Pay As You Earn Income Tax

[crookesey]

When I was working I more often than not received annual tax refunds of circa £1000, my salary varied from month to month and our salary system didn't take account of this eg £6000 in month one of the tax year, £1600 in weeks two and three, but no smoothing process.

 

My son works in private occupational therapy, he has two salaries from two clients, he has just received a £500 refund. My wife draws her state pension and a part time salary, she has just received a refund of just under £600.

 

Are the government deliberately 'borrowing' huge amounts of money from us, I could teach a child how to apply tax codings, why do the Revenue find it so taxing?

 

[ampersand]

Are HMRC deliberately overassessing tax liability or just not very good at their job?

 

It's a tricky one

[taxman]

Because PAYE does not operate on a real time basis. Changes in income, benefits etc may only be brought to HMRC's attention at the end of the year. A reconciliation then takes place and any under/over payment is either paid back or included in the code for the following year.

 

This end of year reconciliation has always been done and under/overpayments have always been the result.

 

The great vision for the future is that PAYE will run in real time but God only knows where that will lead.

 

Here is all you need to know about the proposals for Real Time Information operation of PAYE

[crookesey]

HMRC don't assess tax liability month-to-month. It is the company that are doing it wrong.

 

My company used Grant Thornton's salary/taxation computer package, it does not include any 'smoothing out' system. I recall using manual tables and getting it closer than one of the countries largest firms of accountants. The Revenue will not mind, they will be paying out millions in wages to folk paying us money back that should not have been deducted in the first place.

[gnvqsos]

My company used Grant Thornton's salary/taxation computer package, it does not include any 'smoothing out' system. I recall using manual tables and getting it closer than one of the countries largest firms of accountants. The Revenue will not mind, they will be paying out millions in wages to folk paying us money back that should not have been deducted in the first place.

 

I think you will find itis computerised;you are right to point out that HMRC are like a bank that borrows our money and seldom pays interest.It does manage to charge the same though.

[andygardener]

Because PAYE does not operate on a real time basis. Changes in income, benefits etc may only be brought to HMRC's attention at the end of the year. A reconciliation then takes place and any under/over payment is either paid back or included in the code for the following year.

 

This end of year reconciliation has always been done and under/overpayments have always been the result.

 

The great vision for the future is that PAYE will run in real time but God only knows where that will lead.

 

Here is all you need to know about the proposals for Real Time Information operation of PAYE

 

I appreciate that realtime is pretty tricky to do but i got a cheque 2 months ago for 800 overpaid tax from 2008. No interest or "penalties" just the money the revenue had hung onto for 3 years.

 

It would be reasonable for the revenue to pay interest/penalties in the same way they charge them, might incentivise them to get their sums right in the first place and not hang onto taxpayers money interest free for 3 years?

[taxman]

I appreciate that realtime is pretty tricky to do but i got a cheque 2 months ago for 800 overpaid tax from 2008. No interest or "penalties" just the money the revenue had hung onto for 3 years.

 

It would be reasonable for the revenue to pay interest/penalties in the same way they charge them, might incentivise them to get their sums right in the first place and not hang onto taxpayers money interest free for 3 years?

 

But as has been pointed out HMRC don't "collect" PAYE tax and so didn't get any sums "wrong", the employer does. If your employer has overdeducted tax and HMRC have given it you back I can't really see why you would object.

 

It all depends on when HMRC had the information to hand in order to carry out your PAYE reconciliation. If they had the info back in 2008 and just never got round to checking your pay/tax figures then you would be justified in asking why they hadn't got their fingers out.

 

Unfortunately senior management have never really understood the importance of the annual PAYE reconciliation until last year when it bit them on the arse and they suddenly found they had 2-3 years worth of reconciliations to do all at once. Prior to this it was under resourced and never really prioritised.

 

If you have any faith in our new computer system then there should be fewer and fewer over/underpayments going back further than a year. If the real time stuff ever gets going then there should never be any over/underpayments.

 

Given our history re IT contracts though I shouldn't hold my breath that all will be fine in the future, every IT contract we touch seems to be a disaster.

[andygardener]

But as has been pointed out HMRC don't "collect" PAYE tax and so didn't get any sums "wrong", the employer does. If your employer has overdeducted tax and HMRC have given it you back I can't really see why you would object.

 

It all depends on when HMRC had the information to hand in order to carry out your PAYE reconciliation. If they had the info back in 2008 and just never got round to checking your pay/tax figures then you would be justified in asking why they hadn't got their fingers out.

 

Unfortunately senior management have never really understood the importance of the annual PAYE reconciliation until last year when it bit them on the arse and they suddenly found they had 2-3 years worth of reconciliations to do all at once. Prior to this it was under resourced and never really prioritised.

 

If you have any faith in our new computer system then there should be fewer and fewer over/underpayments going back further than a year. If the real time stuff ever gets going then there should never be any over/underpayments.

 

Given our history re IT contracts though I shouldn't hold my breath that all will be fine in the future, every IT contract we touch seems to be a disaster.

 

Thanks for the explanation taxman, to be honest i'm not that bothered about the 800 nicker as long as the situation has been addressed, just seemed like a long time to hang onto cash, but if its been sorted by new systems for the future then all well and good.

[crookesey]

But as has been pointed out HMRC don't "collect" PAYE tax and so didn't get any sums "wrong", the employer does. If your employer has overdeducted tax and HMRC have given it you back I can't really see why you would object.

 

It all depends on when HMRC had the information to hand in order to carry out your PAYE reconciliation. If they had the info back in 2008 and just never got round to checking your pay/tax figures then you would be justified in asking why they hadn't got their fingers out.

 

Unfortunately senior management have never really understood the importance of the annual PAYE reconciliation until last year when it bit them on the arse and they suddenly found they had 2-3 years worth of reconciliations to do all at once. Prior to this it was under resourced and never really prioritised.

 

If you have any faith in our new computer system then there should be fewer and fewer over/underpayments going back further than a year. If the real time stuff ever gets going then there should never be any over/underpayments.

 

Given our history re IT contracts though I shouldn't hold my breath that all will be fine in the future, every IT contract we touch seems to be a disaster.

 

Who had the interest free loan for three years?