Taxpayers who make a taxable gain on the disposal of a UK residential property have to report this gain and pay the CGT due within 30 days of the property deal completion date. These actions both have to be performed using the badly designed UK property reporting service.
This online property reporting service does not transfer data about the disposal or the tax paid into the SA tax return system, as we explained on 8 July 2021, so the reporting and payment functions have to be repeated at when submitting the SA tax return. This is an unnecessary duplication of tax compliance work, which also requires the taxpayer to separately authorise their tax agent to act for them on two different HMRC systems.
Where the taxpayer can not manage the digital process, perhaps because they don’t have the UK documents which will allow them to complete the online ID checks, a paper return of the property disposal can be submitted.
However, where a paper return has been filed the CGT can‘t be paid until HMRC issue a payment reference and a demand for the tax due. This can take from three to six months, as HMRC has a backlog of paper returns to process.
HMRC has now confirmed that taxpayers will have 30 days from the issue of a demand to pay, rather than 14 days to pay. A late payment penalty will not be issued if the tax is paid within 30 days of the manual demand charge. However, a late filing penalty may apply if the paper return was not submitted within 30 days of the completion date – this can be appealed.
Written by the Tax Advice Network