Auto-coding and self assessment taxpayers

I have had a nightmare with this aspect of PAYE.With many sources of income subject to PAYE each year all the coding notices when first issued are wrong and it takes many expensive phone calls EACH YEAR to get it right.I know what I am doing, but heaven help the ordinary taxpayer.
Nobody at a junior level at HMRC knows what they are doing,and if they promise to do something,they do not.
Most years this situation finished up with me making an official complaint!
The present PAYE system is not fit for purpose and should be changed root & branch to bring it into the 21st Century.

I have a client with PAYE earnings near to the higher rate threshold who is also a partner in a partnership from which she has an annual partnership share, so she is in SA and submits returns. The pension contributions will achieve tax relief at higher rate. She has paid pension contributions in the past which HMRC have not coded in. Following the submission of her 2012 tax return her code for 2012/13 has recently been changed to include the personal pension contributions, which will reduce the tax paid for 2012/13 (and for 2013/14 etc) and will probably result in a repayment of PAYE. I think it would be better for her to maintain the tax deducted under PAYE to minimise the amount payable under SA, and she agrees, but HMRC will not agree to removal of the extension of her allowances as this would "knowingly ove-rtax" the client, which they are not allowed to do.

Simon, we are surprised by this. It is our understanding that you can call and have the pension contributions removed from the code; at least that has been the experience reported to us. What is the legal basis for HMRC's refusal please?

I have also, in the past, been unable to get reliefs (rather than deductions) removed from codes.

One year HMRC converted a potential underpayment into an actual underpayment in error and, having failed to get it corrected, from then on I took the approach of trying to remove everything I could from my husband's code.  I used the Additional Information box, which was ignored, then rang HMRC but they were adamant that the reliefs could not be removed.

I think that HMRC were wrong as PAYE10001 says that an individual must normally make a specific claim to a relief before HMRC can give the relief in a code.  This is further backed up by the Relief Instructions Manual RE282 which says that, for personal pension relief, claims should be/may be made on the tax return.

Unfortunately HMRC do seem to want to code relief for pension payments as the tax return guide says "if you have a tax code, to help us get the right code enter details of any 'one-off' pension payments included in box 1 in the Any other information box".

One of our problems was for Gift Aid where we were claiming the relief in a different year to the payment, as you are allowed to do.  In the end I adopted the approach of putting all of the Gift Aid in the one-off payments box.

The reason HMRC staff may have problems with removing reliefs from codes is that the manual sections dealing with objections to coding notices (PAYE 12001 and 13075) only refer to removing income from the code, in which case they are supposed to enter the figures instead into non coded income.

It is interesting that others have been successful in getting reliefs removed from their codes.  Would it be possible for the Tax Faculty to get confirmation from HMRC that reliefs can be removed from codes, preferably with a manual reference that can be quoted by those of us who have not been successful?

Thank you

Shirley