Issue 131 of HMRC’s latest Agent Update is available. HMRC has also shared with us the below additional information in support of this. This is intended to provide useful additional background information/context.
Address rejections
Investigations are continuing on Self-Assessment (SA) registrations that are being rejected on the basis of the address. This is related to routine enhancements HMRC is continually introducing to ensure taxpayer information is kept secure.
HMRC’s hints and tips article in Agent Update 128 details some of the ways in which agents themselves can help reduce the number of rejections, particularly by ensuring that the address from the Royal Mail Postcode Finder is used in the client’s Personal Tax Account and that this matches any subsequent SA repayment claims.
HMRC does not currently envisage being able to adopt a solution to this issue in the short term therefore we have been asked to remind agents to continue to report instances of rejection.
Missing PAYE Codes
HMRC continues to examine where PAYE codes do not appear on the PAYE Desktop Viewer. It has been established that where there has been no change to a PAYE code, then the previous year’s code is carried forward or uplifted following the start of the new tax year. In these circumstances the code is not visible on PAYE Desktop Viewer. The PAYE Desktop Viewer will, however, display codes sent to employers.
Auto coding queries
It has been confirmed that a taxpayer may still have PAYE expenses coded in their tax code despite ceasing SA because those expenses are still possibly relievable. Ceasing SA will not remove expenses already coded. It is therefore the taxpayer’s responsibility to check their current tax code and notify HMRC if those expenses are no longer relevant.
When a taxpayer ceases SA, the link between PAYE and SA is broken and therefore any data relating to employment expenses from the return is sent to be updated. Please note that if a taxpayer or agent has updated HMRC in the current tax year to advise of a change to a tax code, the expenses on the latest return submitted will not alter that code. This is because the tax return is current year minus 1 hence the in-year update from the taxpayer/agent will be the most up to date information. If a taxpayer believes that the tax code is incorrect they should follow HMRC guidance on this.
SA returns filed after 30 December: tax code adjustments
HMRC processes a vast amount of data each year. To do this, it carries out planning activities and decides the timeline of those processes which depend on resource availability, requirements, and priorities. On some occasions HMRC may need to turn off processing of specific information if it believes it will impact on the delivery of other functions.
HMRC processes PAYE codes before the end of the filing deadline for SA as processing in January allows taxpayers to review and advise of any changes needed before the new tax year starts. You can read more about this process on GOV.UK. SA returns which require clerical overview because of an error may miss the deadline for the PAYE code review hence these tax codes will therefore include the latest available information.
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