Paye

Treasury written question – answered on 10th February 2010.

Alert me about debates like this

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

To ask the Chancellor of the Exchequer

(1) what the outcomes were of the HM Revenue and Customs annual review of errors in respect of automatically-processed Pay-As-You-Earn in (a) 2006, (b) 2007, (c) 2008 and (d) 2009;

(2) what the all-cases accuracy rate was for (a) self-assessment and (b) Pay-As-You-Earn for (i) 2006, (ii) 2007, (iii) 2008 and (iv) 2009;

(3) how many (a) self-assessment and (b) Pay-As-You-Earn cases were processed manually in (i) 2006, (ii) 2007, (iii) 2008 and (iv) 2009;

(4) what the accuracy rate was for (a) Pay-As-You-Earn and (b) self-assessment cases processed (i) automatically and (ii) manually in (A) 2006, (B) 2007, (C) 2008 and (D) 2009;

(5) what the tax effect accuracy rate was for (a) self-assessment and (b) Pay-As-You-Earn for (i) 2006, (ii) 2007, (iii) 2008 and (iv) 2009;

(6) what the causes were of the tax effect errors in the (a) self-assessment and (b) Pay-As-You-Earn system in (i) 2006, (ii) 2007, (iii) 2008 and (iv) 2009;

(7) how many P35s were manually processed in (a) 2006, (b) 2007, (c) 2008 and (d) 2009;

(8) what the tax effect error percentages for the collection of national insurance through PAYE were in (a) 2006, (b) 2007, (c) 2008 and (d) 2009.

Photo of Stephen Timms Stephen Timms Parliamentary Under-Secretary (Department for Business, Innovation and Skills) (Digital Britain) (also HM Treasury), Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills)

The number of self assessment (SA) and Pay as You Earn (PAYE) returns processed manually is set in the following table.

Tax return year PAYE End of year returns SA
P35 P14 Individuals
2005-06 539,150 3,798,120 4,988,969
2006-07 370,736 3,413,174 4,118,006
2007-08 277,045 2,039,303 2,314,728
2008-09 197,592 1,766,424 (1)-
(1) Not yet available

The requested information on accuracy rates is set out in the following table. HM Revenue and Customs do not use the concept of 'tax effect errors' in the context of national insurance contributions.

Percentage
PAYE All cases accuracy Automatic process accuracy Manual process accuracy Tax effect accuracy( 1)
2005-06 94.7 n/a 79.9 79.9
2006-07 95.1 99.8 82.1 82.1
2007-08 95.1 99.8 83.4 83.4
2008-09 96.2 99.8 83.5 83.5
(1) The PAYE tax effect accuracy results relate to those cases which require a manual intervention and which have been accurately processed to within £1.

Many of the SA cases recorded as not processed accurately will be due to the coding number not being reviewed. In the majority of cases, the coding error is corrected when the SA return is submitted and the taxpayer's tax calculation will ensure the correct amount of tax has been paid.

Percentage
SA All cases accuracy Automatic process accuracy( 1) Manual process accuracy Tax effect accuracy( 2)
2005-06 75.3 n/a 75.3 96.5
2006-07 78.1 n/a 78.1 96.5
2007-08 80.5 n/a 80.5 97.6
2008-09 81.5 n/a 81.5 97.0
(1) There is no information available for SA cases processed automatically because the assumption is that they process with near 100 per cent. accuracy.

(2) The self-assessment tax effect accuracy relate to those self-assessment taxpayers whose tax bill is accurate to within £1.

The main causes of tax effect errors is provided on page 20 of the National Audit Office publication "Accuracy in processing Income Tax", available at:

http://www.nao.org.uk/publications/0607/accuracy_in_processing_income.aspx

Does this answer the above question?

Yes0 people think so

No0 people think not

Would you like to ask a question like this yourself? Use our Freedom of Information site.