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HMRC offers taxpayers advice on online filing hitch

People who have found that HM Revenue and Customs’ online tax return website contains a mistake on the payment of self assessment tax through their PAYE codes have been given advice on what to do.

The error means that people who have tax owing from 2007/08, provided the sum is no more than £2,000, are being given the option to pay it along with their usual PAYE tax deductions in the coming tax year for 2009/10.

The rules state that people who filed their returns before 30 December 2008 could, in fact, choose this option, but not those who filed after that date. The website, however, has still been offering the choice.

The Chartered Institute of Taxation (CIOT) asked HMRC if those who had ticked the box to code out underpayments through their PAYE code would still be able to have those underpayments coded out, rather than having to pay the tax by 31 January 2009.

As a result, HMRC has agreed to provide taxpayers with help and guidance.

The HMRC statement on the problem says:

“There is an issue affecting customers using HMRC’s free online filing product to file their 2007-8 Self Assessment tax return if they have requested to have any tax underpaid collected through their PAYE tax code.

“Usually HMRC can only consider collecting amounts due (up to £2000) through a customer’s PAYE tax code when an online return is filed before 30 December. After this date this option should be unavailable but it is still shown on HMRC’s free online filing product and will be until 31 January.

“If customers use this option believing that having their underpayment coded out is still a valid option, we will show any underpayment in their PAYE tax code if they contact us and ask us to do so. After 9 February we will write to customers who have not contacted us to see if they would like us to code out their underpayment in this way (provided they qualify under the usual rules).

“None of our customers will be unfairly disadvantaged.”

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