Amendments to tax returns

ICAEW has responded to the Call for Evidence: Amendments to tax returns published by HM Revenue & Customs (HMRC) on 7 November 2018. The response is published as ICAEW REP 22/19.

ICAEW supports the government's ambition for an amendments process that is simple and transparent, while noting that it is the complexity of the underlying tax rules which often makes an amendment necessary, particularly where the original tax return was prepared by a non tax professional.

In straightforward cases, we would expect a system which allows (or requires in the case of VAT) digital filing, requires subsequent in time amendments by the same method (which software must be able to facilitate), which retains an audit trail of such amendments, and which HMRC can override to allow late amendments by exception where necessary. We do not consider it possible at this time to implement a digital method of correction that works for all tax returns and all taxes.

Any digital solution must also accommodate the digitally assisted and excluded, which will mean that amendments must also be possible on paper or by telephone.

It is important that taxpayer rights are neither diluted nor limited as a result of any changes following this call for evidence. In particular

  • the ability of taxpayers to protect themselves from discovery assessments
  • the ability to make unprompted disclosures
  • the availability of overpayment relief. In the case of overpayment relief, extending the right to amend tax returns to within the four year overpayment relief window would be an administrative simplification.