How do I account for an overpayment from last year on this year's P35?

I overpaid my PAYE & NIC for 2010, I know this because HMRC sent me a notice of overpayment and told me to deduct the amount from my next 2011 payment. I did this but how do I account for it when completing my P35? TAS is calculating my total payment as per my P32s and showing I still have this amount now payable. How do I let the HMRC know that this is the amount they told me they would apply last year’s overpayment to?
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  • Hi Janet,

    Your P35 is correctly showing what is due for the tax year 2010-2011, so this doesn't need to be adjusted. Since HMRC have asked you to deduct the overpayment from what you've paid this year, you've done exactly the right thing by reducing the payment you've made to them by the overpayment. The Amount Now Payable is for your information only, and filing your return with this outstanding figure shouldn't cause you any problems - HMRC will offset the amount you've paid against the amount of last year's overpayment.

    I'd suggest you contact HMRC to confirm that they are happy for you to file your 2010-2011 return with this outstanding amount, and that they'll automatically offset this against your overpayment. If so, just file your return in the normal way.

    If they do want you to show the reduction on the P35, you can enter a P35 adjustment, but they'd need to tell you where to enter the overpaid value - there isn't a box on the P35 for a previous year's overpayment, so they might ask you record it in one of the other boxes. We can help you to enter a P35 adjustment, if that's what HMRC ask you to do.

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