HMRC to review Tax Returns submitted for 2016-17.
HMRC has confirmed that from 19 November 2018 it will be reviewing and reworking up to 30,000 self-assessment returns for 2016-17 filed online where it considers that there is a risk that its tax calculator has incorrectly computed the individual’s tax liability.
The 2016-17 self-assessment tax return season was challenging for many people which was due to the significant increase in the number of returns which were subject to an exclusion. An exclusion applies when HMRC’s tax calculator will not compute the correct tax liability.
For some exclusions it is not possible to file online as HMRC’s system will not accept the return. For others it was possible to file online but the system would not calculate the tax liability correctly from the information on the return. In the latter cases individuals, particularly the unrepresented, may not have appreciated that their tax had been incorrectly calculated.
HMRC is looking to start the process of reworking computations on 19th November 2018. Where the tax position has changed the individual will receive a new SA302 calculation.
The taxpayer will be informed by letter of the correct income tax liability calculation for 2016/17 and any revision to 2017/18 payments on account, and when those revised amounts need to be paid. HMRC will confirm to those taxpayers that they will not have to pay late payment penalties and/or interest attributable to any additional amount arising from the correction if it is paid before the revised due date. If you receive an amended SA302 return then you should contact your agent or accountant immediately.
HMRC is expecting that it will only be necessary to actually amend about half of the 30,000 returns that they have identified for review. On this basis, the amendments should take around a week to process.
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