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Where Taxpayers and Advisers Meet
Editorial - The Nightmare of PAYE OVERpayments
18/06/2014, by Mark McLaughlin CTA (Fellow) ATT TEP, Tax Articles - General
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TaxationWeb's Mark McLaughlin recounts another woeful tale of HMRC holding on to taxpayers' money - only this time, it's personal. 

 
At the start of 2014, I received a letter from HM Revenue & Customs (HMRC) about an overpayment which had arisen on my company's PAYE scheme for 2012/13. The letter broadly pointed out the overpayment and requested an explanation of why it had arisen before HMRC would repay it.
 
I checked the records for the PAYE scheme (there are two employees, including me). The overpayment pointed out by HMRC was indeed correct. It arose because of a change in my tax coding towards the end of 2012/13, which generated a large tax overpayment. I had assumed at the time that HMRC would repay the overpayment shortly after the year end.
 
I replied to HMRC's letter with the explanation of the overpayment which they had requested, together with documentary evidence.
 
Time went by, and no repayment was received. Eventually, on 21 March 2014, I resorted to ringing HMRC's employer helpline. I was told that the repayment was being issued that day, and a cheque should arrive by 11 April. It didn't arrive, so I rang HMRC again on 23 April. I was told that no cheque had been issued, and that the overpayment had been reallocated against 2014/15! I pointed out that the monthly PAYE amounts for 2014/15 were small, and probably insufficient to offset against the overpayment. The HMRC officer therefore requested authorisation from another HMRC department for a repayment to be issued. I was told that a cheque would arrive by 6 June.
 
No HMRC cheque arrived, so on 13 June, I rang HMRC again (bear in mind that would be waiting in HMRC's employer helpline queue for 20-30 minutes prior to each conversation). This time, I was told that the matter had been passed to another HMRC department, but nothing had been done. The HMRC officer apologised, and said that he would contact the other department to request that they issue the cheque, or contact me with any queries. However, I was advised to ring HMRC again on 23 June, if I don't hear from them!
 
Can you imagine if I had owed HMRC tax for 2012/13? I would have been faced with penalties, interest and probably a hard time from HMRC's tax collectors. But HMRC owe me money. What can I do about it? Not a lot.
 
The moral of this story? Don't allow yourself to get into a position where HMRC owe you money, if you can help it. Otherwise, in my experience (and I imagine that my experience is not unique), you are likely to suffer.
    
Best wishes,             

Mark McLaughlin

Managing Editor

About The Author

Mark McLaughlin is a Fellow of the Chartered Institute of Taxation, a Fellow of the Association of Taxation Technicians, and a member of the Society of Trust and Estate Practitioners. From January 1998 until December 2018, Mark was a consultant in his own tax practice, Mark McLaughlin Associates, which provided tax consultancy and support services to professional firms throughout the UK.

He is a member of the Chartered Institute of Taxation’s Capital Gains Tax & Investment Income and Succession Taxes Sub-Committees.

Mark is editor and a co-author of HMRC Investigations Handbook (Bloomsbury Professional).

Mark is Chief Contributor to McLaughlin’s Tax Case Review, a monthly journal published by Tax Insider.

Mark is the Editor of the Core Tax Annuals (Bloomsbury Professional), and is a co-author of the ‘Inheritance Tax’ Annuals (Bloomsbury Professional).

Mark is Editor and a co-author of ‘Tax Planning’ (Bloomsbury Professional).

He is a co-author of ‘Ray & McLaughlin’s Practical IHT Planning’ (Bloomsbury Professional)

Mark is a Consultant Editor with Bloomsbury Professional, and co-author of ‘Incorporating and Disincorporating a Business’.

Mark has also written numerous articles for professional publications, including ‘Taxation’, ‘Tax Adviser’, ‘Tolley’s Practical Tax Newsletter’ and ‘Tax Journal’.

Mark is a Director of Tax Insider, and Editor of Tax Insider, Property Tax Insider and Business Tax Insider, which are monthly publications aimed at providing tax tips and tax saving ideas for taxpayers and professional advisers. He is also Editor of Tax Insider Professional, a monthly publication for professional practitioners.

Mark is also a tax lecturer, and has featured in online tax lectures for Tolley Seminars Online.

Mark co-founded TaxationWeb (www.taxationweb.co.uk) in 2002.

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