I have a client who accidently paid last quarter's NIC & PAYE twice meaning no payment will be needed this quarter. I had a client in a similar position previously who paid twice in one month meaning no payment was needed in the following month (he went online to pay his quarterly rent and accidently sent the money to HMRC instead!). In his situation the accountant advised to make a payment of £1 so that HMRC received a payment for the month but he wouldn't be continuing to increase the overpayment.
In respect of the client who's quarterly payment is due but none is needed due to the previous overpayment, would it be best to make a minimal payment or file a notification online that no payment is due for this quarter?
The reasoning for sending £1 may be that it is easier to train clients to send something each qtr/mth than to **** about with nil declarations. However, if you can declare that no payment is due in the qtr/mth then it is unecessary to send even £1. Better to say so (providing it is certainly nil due), than to make a token payment that leaves some doubt.
Or would you rather leave some doubt? Indeed, was last quarter's liability the exact same amount?
The payment due this quarter is less than the previous one so even taking into account the amount due for this quarter, the client will still have overpaid around £600. The business is a seasonal one so the hours worked by employees have dropped considerably over the last month or so. Hopefully everything will even out by the end of the next quarter.
If it were me I would have written to HMRC to notify them of the overpayment and that it would cover this months amount of PAYE due. I'd also be tempted to speak to them over the phone just to make sure. Also, if there won't be a nil balance on the P32 I wouldn't file a nil return as it isn't entirely true.
There is a link for nil declaration - just complete the boxes (I believe however I have not had to do it before). http://www.hmrc.gov.uk/payinghmrc/paye-nil.htm
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
