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Self assessment – the hot topics this week

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23rd Jan 2009
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As we head for the end of January, editor Rebecca Benneyworth presents a roundup of the Self Assessment topics and issues that members have found a challenge this week.

File only and the question of 64-8’s seems to crop up every day. HMRC’s staff often seem to be unaware of this facility, and indeed some software company helplines also seem less than helpful on the subject. If you are registered with the Gateway as an agent you can file tax returns for any taxpayer, irrespective of whether the taxpayer is registered to you or not. The authentication process no longer checks your client list when you submit as an agent, and accepts any valid return from your user ID. You will need third party software to do this, but it is simple and speedy solution to clients arriving this late in the day (if you want to service the business!)

There was a flurry of debate on the subject of extended deadlines this week, but HMRC press office kindly logged on to our site to tell members that this was not the case. The deadline for returns filed online remains 31 January. If returns are filed online after midnight on 31 January they will be logged as late. However, penalties for late filing will not be issued under the practice established by the Steeden v Carver case. This case prevents a late filing penalty from applying until the return has been late for a complete day. So returns filed online up to midnight on Sunday 1 February are still late but will not attract a penalty. Returns filed later than this attract a penalty, but for individual returns ONLY (i.e. not trust or partnership returns) the penalty is capped at the tax outstanding on 31 January, so you can limit the penalty to zero by advising the client to pay his tax due.

Another question cropping up with amazing regularity is whether directors need to complete a tax return if they have not been issued with one and have no income other than interest taxed at source and their PAYE salary. The answer is no, but I couldn’t put it any better than Martin who answered Chris Prescott’s query.

The Tax Faculty of the ICAEW has reported a problem with the online account display of amount due as at 31 January 2009, and member John Bland has also commented on this. The Online accounts show the second payment on account for 2008-09 which is actually due on 31 July 2009 as part of the amount due on 31 January 2009. It is not until you "drill down" the amount shown as due on 31 January that you find that it includes both payments on account. The obvious warning is to make sure that you check through the amounts showed as owing and compare to the result produced by your software before advising clients about payment.

Finally, reduction of payments on account. HMRC has a problem with the IT for this to be done through the online system. If you need to reduce payments on account – which many will this year given the economic conditions – you will need to do so either on the tax return, by paper SA303, or by phone. The online facility for doing this is not working correctly at the moment, and although HMRC have their IT partners working on it, this would seem a somewhat intractable problem.

For more help and resources see Self assessment – the only resource you will ever need.

If you have been affected by any technical problems - or want to record that the filing mechanism has been working well for you - please take a couple of seconds to complete our weekly SA Online poll

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Replies (6)

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By beeley.talktalkbusiness.n
30th Jan 2009 19:35

please pay twice
I have noticed (and had it confirmed by HMRC) that the online calculator for self assessment for individuals filing on line takes no account of payments on account made during the year

The total shown as due at 31 January is tax on whole of income plus first payment on account, disregarding any payments on account entirely

this means that a lot of people without professional advisors will be paying twice as much as they should and, as it shows tax payable, will not have registered for a refund so will be waiting a long time before they get their money back

Another stealth tax?

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By mikewhit
27th Jan 2009 17:11

No tax - no penalty
No Barry, as I understand it for individuals (but not partnerships) the penalty is the lesser of £100, and any tax owed.

Hence if no tax is owed, no penalty.

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By barrygould.hotmail.co.uk
27th Jan 2009 13:57

Tax return deadline
Thanks for that Rebecca,

He hasn't actually got any tax to pay, as he was employed up to the 15/1/08, and the self employment from 15/1/08 - 5/4/08, he has made a loss so should i get him to send a payment to the revenue for £100, for the late filing penalty.

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Rebecca Benneyworth profile image
By Rebecca Benneyworth
27th Jan 2009 12:20

Third party software
You can file only (i.e. without a 64-8 in place) using third party software, but without a UTR you will not be able to file online at all.

The best suggestion is to calculate the tax and get your client to pay this today or tomorrow so that it reaches HMRC by Saturday. That way the penalty will be capped at zero.

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By barrygould.hotmail.co.uk
26th Jan 2009 14:23

Tax Return Deadline for new clients.
Hi,
I have just taken on a new client a couple of weeks ago, who has been self employed since the 15/1/2008, but has not registered for self assessment. I have now registered him as self employed, but waiting for a unique tax reference number to come through from the revenue. They said it would be fast tracked about 7 days. It is now 12 days and am still waiting for this number. I can't authorise myself as an agent to this client on a 64-8 until i receive this number, and with the deadline approaching on Saturday, i am panicking that i am not going to be able to file his return online in time, to avoid paying the late filing penalty. Have spoke to the revenue today, but they can't give me that information over the phone to say whether it has been sorted or not.

Have you got any ideas or suggestions that i can get round this, to avoid paying a late filing penalty thorugh lateness of the tax return.

Kind Regards

Barry Gould

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By User deleted
23rd Jan 2009 14:09

I would be...
...interested to know why you believe that the penalty for a trust is not capped at the tax outstanding on 31 January (the end of your third paragraph above refers).

It was my understanding that Section 93(7) TMA 1970 applies to trusts as well as individuals.

I am interested because I may need to rely on this in the very near future!

Thanks

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