Tax refunds and forms P800, RTI penalties, HMRC forms

As the sun shines merrily outside, the temperature of thousands of accountants is raised by yet more incorrect tax computations, penalty notices and online HMRC forms. 

Last week we shared tips on how to deal with all of those: forms P800, RTI penalties and an outlet for your frustration with badly designed electronic forms.

Tax refunds and forms P800
HMRC has started the end of year reconciliation process for taxpayers taxed under PAYE. This involves sending a form P800 including a tax computation to those taxpayers who have underpaid or overpaid tax for 2014/15. Remember you won't receive copies of your clients' P800s, even if you have authority to act, so ask your clients to pass on any P800 forms they receive.

Where taxpayers are found to have overpaid tax for 2014/15 a cheque for the tax refund should arrive about two weeks after the P800. The taxpayer doesn't have to request the refund. However, before cashing the cheque the P800 calculation should be carefully checked against the taxpayer's form P60 or payslips for 2014/15.

You may remember that last year HMRC issued a huge number of incorrect P800s (our newsletter: 16 October 2014). The cause of the 2013/14 errors was never officially revealed, but many suspected the duplicate employment records created by the RTI computer. The problem with duplicate employment records has not been eliminated.

Taxpayers who have underpaid tax for 2014/15 will also receive a form P800, showing the amount of tax HMRC has calculated is due. It is even more important to check any underpayment as the information reported on forms P11D, and claims for business expenses to be deducted, may not have been processed before the P800 was issued.

The Low Incomes Tax Reform Group (LITRG) has reissued its guide on how to check a P800 calculation, which is very helpful. A key problem to look out for is the amount of state pension. If 2014/15 was the first year in which the state pension is received the amount on the P800 will be estimated, as the DWP won't have passed accurate figures to HMRC yet.

If you are completing R40 repayment claim forms for your clients, note the address for submitting those forms has recently changed (see link below). If the taxpayer is not resident in the UK a form R43 should be used for the repayment claim instead of an R40.

This is an extract from our tax tips newsletter dated 18 June 2015. The newsletter itself contained links to related source material for this story and the other two topical, timely and commercial tax tips. 

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