Whatever happened to Process Now Check Later?

Let me start by acknowledging that there are some circumstances where the immediate processing (to completion) of information provided to HMRC by a taxpayer or agent could put the Exchequer at risk.  Quite reasonably, HMRC have put in place for example controls to select for auditing on a risk basis certain repayment claims before the repayment is authorised.  There have been problems with that as well, but that is not the subject of this post (and the moaning about those earlier problems seem to have died a death so presumably they have been addressed).

Subject to the above, the general "process now, check later" principle of Self Assessment is that liabilities should be recognised on HMRC systems pretty much immediately and automatically on the submission of a return.  The facility to file online and cut out the "human factor" in processing this initial stage has by and large worked very well.  Checking the accuracy of the claim comes later, at various stages, and as mentioned above possibly at an early stage if a refund results.  But even then, there is no cause to delay acknowledgement of the claimed liability.

If we file online an original CT return for a client which for the first time contains a claim for R&D relief, we know that the file is going to get transferred from a local CT office to one of the specialist offices that handle R&D claims, and this can take several weeks.  In the meantime, however, the return and comps appear on the online statement typically within 48 hours of filing, in the figures as filed.  So far, so good.

Given the above, what is it with repairs to CT returns?  Quite regularly we find an opportunity to claim R&D relief rather late in the day, which results in two CT returns being filed online at about the same time: One being an original return for the later of two consecutive years, and one being a repair to the previous year.  The later year gets processed immediately.  The repair to the earlier year does not appear to get captured onto the HMRC online statements until AFTER the file has been transferred to the new CT office and some individual outside the automated computer system hits the launch button.

I cannot think of any justification why a repair to a CT return, filed online and in date, and passing validation, should not immediately and automatically get processed onto the system, without human intervention, just as if it were an original return.

Comments

I think in your scenario your

Exector | | Permalink

I think in your scenario you are actually submitting an amended return, not a "repair", but in any event, when I queried the delay in processing FBI submitted CT amendments with our usual CT district, I was advised it is still essentially a manual system in that all of the amended returns go onto a computer generated worklist for subsequent individual intervention. I understand your point is why, and I am unable to answer that specifically, but I can say I was advised that if the amendment produces a repayment of tax, if the relevant box on page 1 of the return is ticked ( ie a repayment is due for the AP or for an earler AP) then that will put the case on a priority work list and it will be looked at sooner.

Thanks for the insight.

Jimlad | | Permalink

This is the first time that it has been suggested to me that there is a distinction between an amendment and a repair.  Presumably a repair implies an admission of error in the original return, where an amendment is simply to include an additional (but voluntary) claim that is permitted in date.

Hopefully, HMRC systems can automatically detect the distinction from the revised entries, because there is no difference in the manner of filing.  I would not want them to flag up an admission of error where none existed.

"Repair" is not really a statutory term

Exector | | Permalink

Basically any changes to a previously submitted return, for whatever reason, submitted by the original filer, will normally be an amendment, assumimg it takes place within the amendmen time limit. I guess the term repair has ben used informally by some in exactly the context you cite, ie a correction to an error of some sort in the original return, but in overall terms the reason for the change is not of any immediate relevance, HMRC are still entitled to enquire into the amended return as they were to the original, obviously with the appropriate switch to the amendment enquiry time limits applying. Clearly of course the nature and reasons for the amendmentt could make it more or less likely that questions might be asked, depending on the circumstances!

 

As an aside, I believe the tern "repair" was used internally by HMRC when they were referring to a correction instigated by them to what appeared obvious and unambiguous errors in a submitted return, in Self Assessment situations, but whether that is still the case, I know not.

Update

Jimlad | | Permalink

More on this, sorry.  Unrelated case.  We filed an original return.  Went through the system in a twinkling.  Subsequently it came to light that there was a s.455 liability undisclosed in the original.  Filed an amendment (online) on 23 May.  The amendment still does not appear on the statement.  In the meantime, client paid the additional CT (which is overdue). And what happens? Some bright spark at HMRC immediately refunds the additional tax paid, the following day, because the liability has not been posted to the account.

So, I understand that the processing of amendments needs to be done manually.  That can only be for technical programming reasons, and as such has the potential, given the will, for correction.  I would have thought that the desire to correct this should be common ground among HMRC and the taxpayers or their agents alike.  It cannot be a good use of an Inspector's resources to key this stuff through 2 months later.

But that aside, what would also be useful is if the agent were able to tick a box on the client's online record to suppress the issue of refunds.

(and while they are about it, include a note of the 3-digit tax office code, and to which Accounts Office payments should be made as between Cumbernauld and Shipley).

its more check later process even later

david5541 | | Permalink

the number of times i get excuses like "security checks" or " the wrong box was clicked/ticked" or just hasn't been dealt with as we have 5 weeks of postal delays......

 

recently someone in collection raised a discovery assessment without sending us or the client a copy of the discovery assessment and the enquiry inspector knew nothing about it.-of course their excuse will be it got lost in the post....

fortunately the inspector was diligent enough to follow it up as i would.

no-one else understood it and we could loose the client over it.

they were so fed up they just paid the tax.

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