Disputed PAYE charges with HMRC
In August, HM Revenue & Customs began sending letters to those employers disputing HMRC’s PAYE charge, apologising for the length of time it is taking to resolve the dispute and explaining that HMRC will be in contact as soon as possible.
HMRC acknowledge that there are a number of different reasons for disputed charges, with the main cause being duplicate employments. Filing PAYE information in real time means that there is an increased chance of an error occurring which can then create a duplicate record. HMRC have improved its guidance and IT to prevent the most frequent errors from generating a duplicate employment in its systems and put in place processes to correct as soon as possible those that do get through.
HMRC’s help sheet, Reconciling PAYE Charges, sets out steps employers can take to eliminate some of the most common errors and resolve the issue without having to contact HMRC. The help sheet also explains what employers should do if, after checks, they still cannot reconcile the charge.
Despite HMRC having stated that penalty letters will not be issued for late submissions of a Full Payment Submission, for smaller employers with less than 50 employees before March 2015, thousands of penalty letters have been issued for various other reasons.
Incorrect penalty letters have been issued when:
A month 12 FPS showing zero values and showed it as their final RTI of the year; or
A month 12 EPS (employers payment summary) with zero values whether or not declaring final submission for the year; or
A month 12 EPS claiming CIS (construction industry scheme) deductions; or
An EYU (earlier year update) report with zero values.