Mistakes are easy to make, especially when it comes to looking after your business finances. Hitting the wrong key when inputting data is easy to do!
And it’s not just business owners that can create errors – even HM Revenue and Customs makes mistakes! And if HMRC has made a mistake, you should make sure you use their complaints process to reclaim any losses.
Has HMRC made a mistake?
HMRC is a huge department that regulates taxes, payments and customs in the UK. And because it’s so large, it employs a lot of people. They’re only human and human errors and inaccuracies can happen.
Of course, when an error occurs, it may be a pain for your payroll until it’s sorted out. It helps to understand what the common mistakes are and how to respond to them. Also, it’s useful to identify who was at fault.
So, what counts as an error? HMRC mistakes include:
- Incorrect, outdated or non-authorised PAYE codes.
- Other inaccuracies such as typos or employee information, particularly where pensions or additional income is concerned.
- Software snags. This is particularly common approaching new tax years when systems are working to capacity.
PAYE mistakes
Pay as you earn (PAYE) is a tax against employees’ income and is a common area for HMRC errors. If you’re running your business, payroll can be time consuming and it’s easy to make miscalculations.
Missing paperwork, such as P45s, can be a headache and lead to errors. HMRC encourages business owners to routinely check and verify tax calculations because, it says, these ‘operational’ errors often occur.
If HMRC has made a mistake, you can challenge it through its complaints process. But with long call waiting periods, this can be frustrating. It’s best to use a payroll expert, such as Concept Accountancy, no matter what size your business is. Accountants will ensure the correct information is provided before submission. And if an error has been made by HMRC, they are best placed to make a challenge.
Tax refund mistakes
Some of the most frequent mistakes are around tax overpayments and underpayments. If HMRC determines that you’ve overpaid tax contributions, then you will be eligible for a refund or rebate. If HMRC believes you have underpaid, you will be issued with a bill – known as a P800 or Simple Assessment Letter – to request the missing funds.
These mistakes tend to come from inaccuracies in tax records and the biggest culprits. It pays to check your tax calculations and bills to correct mistakes promptly.
The most common inaccuracies in these instances take place with:
- National Insurance
- Payment dates
- Employee information
- Starting and leaving dates for employees
- Pay or deductions
What if I receive an unexpected bill or letter?
First of all, you should double check the authenticity of any HMRC bill or letter. Are the unique numbers correct? Is the letter asking you to visit a website that isn’t the official gov.uk site? HMRC paperwork is often faked by scammers, so make sure it’s real before you do anything.
If you have an accountant, speak to them as they are likely to have received information. They will also be able to verify the authenticity of any letter.
Remember, HMRC won’t email you a demand or send you a text demanding your bank details.
Once you’re sure, you can then double check the claims of inaccuracies. Don’t leave things to the last minute. The quicker you chase up correspondence, the better.
Can I challenge the decision?
You can challenge HMRC decisions. Make sure you keep any evidence needed and then use the official complaints process.
If you have an accountant, then speak to them and ask them get onto the case.
For more information about how we can help your business with HMRC matters and payroll, fill in the form below.