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HMRC expect to start the PAYE end of year reconciliation process for 2010/11 in the second half of July.
This is the second time HMRC have used the automated end-of-year reconciliation functionality on the National Insurance and PAYE Service (NPS).
Once the process starts HMRC will deal first with cases where the taxpayer has paid too much tax. P800 tax calculations will start landing on doormats towards the end of July and the department hopes to complete this work by the end of September.
HMRC expects to complete the work for taxpayers with underpayments, where they hold all the relevant information, by the end of December. The idea is to give taxpayers time to query the calculation before the start of the 2012/13 annual coding programme.
Last year, HMRC temporarily increased the £50 tolerance to £300 for 2008/09 and 2009/10 because of the number of calculations expected to be produced, for 2010/11 the tolerance has reverted to £50. According to HMRC, this is ‘a sign of restored service because there is no justification for a higher tolerance as there was last year’.
The department believes it ‘is in a much better position on PAYE than last year and is starting the end-of-year reconciliation process several months earlier than in 2010’.
They add that they ‘are more up to date in dealing with customer correspondence and contact centres are also providing a better service than this time last year’.
In answer to enquiries from Taxation, a Revenue spokesperson said ’NPS will not reconcile where it knows that a P11D is outstanding, to avoid some of the problems we had last year’.
