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Resolving HMRC employer liabilities and payments account errors


Published: 14 Mar 2023 Update History

ICAEW’s Tax Faculty requests real-life examples to help convince HMRC of the problem.

Over the years, ICAEW’s Tax Faculty has received many reports of differences between HMRC’s employer liabilities & payment (L&P) account figures and employers’ own records. These have often proved difficult to resolve. Employers have lost trust in HMRC’s employer L&P records, owing to the errors that have arisen since RTI was introduced. 

Discrepancies seem to arise largely because HMRC allocates payments to liabilities other than those for which the payment was intended. This could occur because of late payment interest charges arising following a payment misallocation by HMRC. HMRC’s system allocates subsequent payments first against interest charges, then against the earliest apparent underpaid balance. 

If employers or payroll agents encounter differences between HMRC’s L&P account figures and their own records that cannot be reconciled, they should call the Employer Helpline: 0300 200 3200. Have the PAYE scheme name and reference numbers to hand. Ask for the difference to be sorted out by HMRC’s Charges Resolution Team (formerly the Disputed Charges Team).  

The faculty is aware that HMRC’s Debt Management & Banking (DMB) sometimes continues to chase for payment after a dispute is raised.  

Make a formal complaint if HMRC’s Charges Resolution Team does not resolve the difference within a reasonable time. If acting for a client, seek redress of time-costs paid for by clients. See the faculty’s helpsheet, Making complaints to HMRC

The Tax faculty has recently written to HMRC (ICAEW REP 21/23) expressing its concerns. This letter contains some real examples, but more are needed to help HMRC to identify precisely what is wrong with its processes.  

To contribute, please supply Peter Bickley – in confidence – with:  

  • your/your client’s PAYE scheme name, reference number and accounts office reference number; and 
  • a brief summary describing the problems you have encountered with the entries in HMRC’s employer L&P account and with getting HMRC to put it right.  

Peter will supply the details to HMRC. You will still need to continue to press HMRC on your own account.

Please reassure reticent clients that HMRC does not discriminate against taxpayers who bring proceedings against HMRC in good faith to clarify points of law, or who have made complaints about HMRC’s customer service, IT or processes. See TAXguide 05/14: Effect of legal action against or complaints to HMRC.

For guidance on how to help HMRC to correctly allocate payments, see TAXguide 18/21: PAYE and BIK payments to HMRC

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