Three months ago I registered a new client for Self Assessment as she had purchased a buy-to-let property which gave rise to a decent profit in 2014-15.
Two days ago she and I received a Form P800 reconciling her PAYE income and giving rise to a refund of over £800. This was on the same day my client had emailed her spreadsheet of lettings income and expenses.
I telephoned HMRC to suggest they did not send the tax refund as ultimately it would not be due to my client. I was told that it was already in the post, and as it turned out my client had the cheque today. We have agreed she will bank it and pay back the money under Self Assessment. We cannot trust HMRC not to lose the cheque if we sent it back, and anyway it would be months before they dealt with it.
I did ask the HMRC agent why they would make a refund on PAYE when they had been advised the client had another income source and had registered to do a Tax Return. Since the agent would not have the knowledge to be able to answer and because her command of English was poor, the question was effectively rhetorical.
The answer is probably that, as per usual, there is a lack of joined-up thinking going into HMRC systems and programming. Oh, it is all so frustrating.