Self assessment glitches

ICAEW has become aware of more errors in HMRC’s self assessment (SA) calculations and a number of other current SA issues. Details are given below. 

These issues come on top of: 

  • A longer list of self assessment exclusions to deal with calculation issues and the first ever in-year update to SA software.
  • The SA (and other) systems being unavailable between Thursday 4 and Saturday 6 January 2018. 

Error in calculation of capital gains tax affecting some trust returns

HMRC has advised us of an issue affecting a small number of electronically filed SA900 SA returns for trusts. HMRC’s systems are showing inaccurate calculations of capital gains tax in some cases. We have been advised that the problem has now been resolved and calculations shown in HMRC’s systems should now be correct for returns filed from 16 January 2018. HMRC will check and correct calculations for returns already filed.   

The 31 January payment should be based on the tax correctly calculated by commercial software. 

Other errors being investigated

Members have reported some further calculation errors; these are still being investigated to check whether they are widespread. 

One report concerns HMRC’s calculator not allowing the CGT annual exempt amount (and possibly any remaining basic rate band) to be wholly set against gains due at 18/28% rather than 10/20%. 

Another concerns two cases where HMRC adjustments for marriage allowance reduced the liability in one case to zero and in another case to the previous value for payments on account. 

HMRC pre-population service within third party software unavailable

Agents are currently unable to use the HMRC pre-population service (for employment data) within third party software. The service was disabled on 16 January 2018 while the problem is investigated. 

SA statements missing and delayed

ICAEW has received many reports of statements not arriving. HMRC has confirmed that SA statements are being issued between 31 December 2017 and 8 January 2018 so clients may not receive them until the third week of January. HMRC has advised that paper SA statements will be issued before the due date for payment where returns were filed by 8 January 2018. 

Payments on account not showing on statements

There has been a recurrence of the issue where payments on account (for 2017/18) do not appear on statements (paper and online). HMRC introduced a fix to correct this issue in December 2017 but it seems that this fix may have missed some cases. 

It may be appropriate to advise clients who rely on HMRC statements to check that the payment on account due on 31 January 2018 is included in the sum they expect to pay. 

Give us your feedback

It is extremely concerning that there are so many issues with HMRC’s SA software this year. ICAEW will pursue this poor service with HMRC. In the meantime we suggest that agents check calculations very carefully. 

Please comment below if you encounter any further issues.

  • Payments made by 31 January were not showing on the HMRC self-assessment pages last week.  They are on there now, but meanwhile, I am aware of payment demands being sent out this month without acknowledgement of the tax already paid!

  • On top of these issues I seem to have a different one. I submitted a tax return using 3rd party software in November that has still not been processed by HMRC. This came to my attention and I rang HMRC on 17 Jan to follow it up. The matter was referred to the processing department and I was told I would hear from them with an outcome by 24 Jan. This date has come and gone and I have since called back twice...only to be told that the matter can only be referred again to the processing department by email. There doesn't appear to be any way of making direct contact with this department internally by the phone advisors or externally.

  • A client was using the HMRC software to input his foreign dividends.  The HMRC software calculated his wife's Foreign Tax Credit Relief correctly but would give him no relief on his own return.  I calculated it for him and helped him input it manually on the HMRC software.  HMRC have accepted that manual calculation...  I have also been using the pre-population data on third party software.  It is great when it works, but the frequency with which I have to re-input my passport details is extremely frustrating and now, as you point out, it simply has stopped working...

  • I wish I understood how HMRC deal with marriage allowance transfer and why what they do seems to keep producing unexpected results. I am looking at a case now where we claimed transfer for 2015-16, via the SA returns, but have not claimed for 2016-17. SA returns have been submitted for 2016-17 for both husband and wife and no claim is made on the return, but despite that HMRC have overridden the return calculations to transfer the allowance. This has increased the wife's tax liability by £220 and given the husband an over-repayment of the same sum. In other

  • he extract e no POA showing was useful as I could use it to demonstrate to one of my affected clients that it wasn't an issue with what I had done but an issue with HMRC. It is frustrating that HMRC cant get the basics right and it does worry me as to what will happen when MTD comes in. I cat recall a worst year for HMRC errors and their reputation is in tatters now.