P800 calculation, Travel and subsistence and umbrella companies: the SDC test, Partial exemption

Last week we took a look at the P800 calculation and why you should check  that your clients’ P800s are correct. We also explored changes to the travel and subsistence rules insofar as they affect workers who provide their services through umbrella companies. Finally, we took a look at the risk areas in relation to VAT returns for partially exempt clients.


This is an extract from our topical tax tips newsletter dated 28 July 2016 (5 days before we publish an extract on this blog). You can obtain future issues by registering here>>>

P800 calculation 
HMRC’s annual PAYE reconciliation process for 2015/16 is now underway and your clients will be receiving their P800 calculations between now and November. As HMRC can and do make mistakes, it is important that you encourage your clients to pass their P800 on to you and that you check it to make sure everything is in order. During the reconciliation process, HMRC compare the tax that they think is due with what has actually been paid and send out a P800 to taxpayers who show and overpayment or and underpayment. 
  
So, what should you look for when checking the P800? 
  
The P800 shows the total income, which according to HMRC’s records, the taxpayer should have paid tax on. This will include wages or salary, any benefits in kind, any pension or taxable state benefits received and any interest on savings. Check the figures against the your client’s P60, P11D, bank statements etc to verify that they are correct. If the figures are wrong, you will need to tell HMRC. 
  
The P800 calculation may show that your client has paid too much or too little tax. There are various reasons why this may be the case and in checking whether the figures are right you should consider whether: ..........

This is an extract from our topical tax tips newsletter dated 28 July 2016 (5 days before we publish an extract on this blog). You can obtain future issues by registering here>>>
  
The full newsletter contained the remainder of this item plus links to related source material and the other two topical, timely and commercial tax tips. We've been publishing this newsletter weekly since 2007; it's clearly written and focused on precisely what accountants in general practice need to know about each week. You can obtain future issues by registering here>>>