In some cases, an individual’s personal tax liability is too complex to be calculated by hand. The combination of variable allowances, reliefs and geographically-dependant rates can defeat even HMRC’s computer programmers, which results in the SA tax return being excluded from online filing.
If you submit a paper tax return after 31 October following the year end, there will be an automatic late filing penalty. However, where the HMRC staff capture (ie scan and attach to the taxpayer’s electronic record) the reasonable excuse claim attached to the paper return, the automatic penalty should be overruled.
A number of tax agents are reporting that late filing penalties have been issued for 2017/18 paper tax returns submitted between 1 November 2018 and 31 January 2019, in spite of a reasonable excuse claim attached to the return. If this occurs for our client, we can ring the HMRC Agent helpline and ask the officer to look at the scan of the return.
Where the reasonable excuse claim has been captured, including the explanation that the return fell into one of the online exclusions for 2017/18, HMRC should cancel the penalty on request. If the reasonable excuse claim was not captured, you need to appeal the penalty, and enclose copies of the reasonable excuse claim plus other relevant information such as the electronic submission rejection.
Version 1 of the list of SA tax return exclusions for 2018/19 has just been issued. This year HMRC has removed all the solved exclusions from the list, leaving only 31 open issues. It’s worth reading through those exclusion categories before you attempt to submit a return, as your tax return software may not flag-up a problem before the point of submission.
Written by the Tax Advice Network