With the self assessment deadline looming, HMRC has issued a special agent update on the topic to help with last minute technical questions to avoid falling foul of overly complex tax codes.
HMRC receives over 11 million digital tax returns each year and approximately 90,000 need clerical review due to mistakes in the first submission. This results in a delay in processing returns, HMRC warns.
Amended returns and self assessment closure letters appear to be some of the most problematic areas, with HMRC warning that it receives ‘large numbers of returns online that were submitted as an amendment. We are unable to process these returns, as the original return has not been submitted. Please make sure that the type of return that you are submitting is correct (live/test and full return/amendment) to avoid delays in processing’.
It basically provides an overview of tools for tax specialists helping clients with compliance issues when completing 2018/19 self assessment tax returns as well as tips on the most common mistakes made on returns.
There is also specific information on how to deal with clients who have received a Form A382 self assessment closure letter relating to a previous year’s self assessment. It is not possible to just file for these clients; instead you will need to initiate contact with HMRC.
HMRC said: ‘If we recently closed your client’s self assessment record this means that you might not be able to submit their return online. If you want us to reopen the account for filing, please get in touch with us by either calling, web-chatting or sending form SA1 to us.
‘This will allow us to prepare your client’s record for SA filing and create the necessary links between our various systems (PAYE, NIC, etc).’
It is also worth avoiding sending any amendments for previous tax years in the busy period running up to the 31 January deadline. ‘Filing an online amendment for the previous tax year on 31 January causes delays and may prevent the amendment from being dealt with automatically,’ HMRC warned. There is no leniency on penalties either if there is a delay so payments must be made on time.
HMRC is unequivocal on this, stating: ‘While the processing of the return may encounter delays, the payment deadline will remain the same. Please tell your clients to pay on time, the amount you have calculated being due along with any potential Payments on Account.’
There are also links to the most popular toolkits, highlighting areas which HMRC sees as tricky in terms of meeting the rules, either due to intense complexity or a failure to follow guidance.
It is worth noting that eight of the technical toolkits have been updated so make sure you use the latest guidance, while there’s also other support available, from the agent account managers service to help on setting up a budget payment plan.
In total, HMRC has 19 toolkits which provide guidance on common errors that HMRC see frequently in filed returns. The toolkits are updated each year to reflect any changes coming in and contain:
• a checklist to help identify the key areas errors often occur;
• explanatory notes which identify the underlying types of error, how to avoid them and a brief outline of the tax treatment; and
• links to relevant online guidance.
The tax authority will also be ramping up their online webinars programme in the next four weeks. These cover topics from trade losses to basis periods, income from property from individual landlords, including restricting finance cost relief and the cash basis eligibility and computational rules, and capital allowances and vehicles.
Agent Talking Points are weekly online webinars for tax agents and advisers, with HMRC experts on hand to answer questions. They last for around an hour, and in the run up to 31 January 2020, they will focus on topics which prove particularly problematic on clients’ returns.