The AccountingWEB.co.uk guide to Self Assessment
This feature by AccountingWEB.co.uk Tax Editor Rebecca Benneyworth brings together advice on any matter related to self assessment filing together with links to the resources provided by HMRC and others that you may need during January to get issues resolved. There are also links to some of the Any Answers topics you may find useful, and we'll be updating this article throughout the month to highlight developing issues.
Returns are due by 31 January 2010 if the return was requested from the taxpayer by 31 October 2009. If the return was issued more recently than that, there are three months allowed for filing the return (on paper or online) but a penalty may be due in respect of late notification of liability (see below).
Extreme weather conditions will almost certainly not lead to an extension of the filing deadline as this is set by legislation, but may in some cases provide a reasonable excuse for late filing.
HMRC's normal practice is to accept that returns which are in the postbox when it is opened on the morning of 1 February (a Monday this year) were filed before midnight on 31 January. Clearly, returns filed online have no such arrangements, as the date of filing is electronically recorded.
Penalties : late returns
The initial penalty for a late individual return is £100, but this is capped at the amount of tax outstanding at 31 January. This capping process does not apply to partnership returns which must be filed online to avoid the penalty of £100 per partner.
HMRC manuals conveniently deal with both fixed penalties of £100 and the capping process, under which the penalty is capped at the tax outstanding on the same page - here. It is worth reminding clients that this capping process is abolished by Finance Act 2009, so will not protect them from their tardiness in future (probably from January 2011).
Steeden v Carver
If filed after midnight on 31 January but by midnight on 1 February the return is late, but there will be no penalty for late filing following the decision of the Special Commissioners in the Steeden v Carver case. This old HMRC Tax Bulletin article explains the case decision - although marked out of date, the analysis of the case is a good clear summary for those who want to know. The rules are also described in the Enquiry Manual at EM4563. General guidance on reasonable excuse is here.
Penalties : failure to notify
You may also have clients who failed to notify HMRC that they are liable to tax on a source of income. The requirement is to notify HMRC by 5 October 2009 in respect of 2008-09. The penalty for this is tax geared, so paying the tax by 31 January can stop the penalty running. This penalty applies irrespective of whether a tax return is issued or not. The structure of this penalty is also changing from April 2010. Typically, these clients do not have a UTR as they have not yet notified HMRC that they are liable to self assessment (see below - issue of UTR's).
Penalties : Inaccuracies on the return
The new penalties for inaccuracies in Finance Act 2007 will apply to any errors on the 2009 returns which lead to an underpayment of tax. You should be aware of the impact of this change on your arrangements for approval of returns and warn clients submitting their records very late that they need to take more care in future. This topic was dealt with in more detail here - including a simple tax return approval form for you to download and use.
Excluded cases and workarounds
Cases where online filing is not possible and the return must be filed on paper include returns where one of the following supplementary pages is required:
- SA102 MP - Members of Parliament
- SA102MLA - Northern Ireland Legislative Assembly Member
- SA102MSP - Member of Scottish Parliament
- SA102WAM - Member of National Assembly for Wales
There is also a list of excluded cases relating to individual entries on the return as for previous years; you should check this list if you are experiencing unexpected rejections.
A list of exclusions and special cases for partnership returns (SA 800) is also provided.
In all of these cases, you should file the return on paper with a reasonable excuse form to prevent a penalty notice being raised erroneously. Do read HMRC's guidance on reasonable excuse in relation to online filing carefully if affected by any of the above exclusions - this is new for 2008-09.
You will need to purchase third party software to file returns for partnerships or trusts and for some special cases of individual returns such as non resident taxpayers. The list of approved providers shows website details but no prices, and also lists the supplementary pages that HMRC does provide on the free software. Our article on Budget software for low volume partnership returns may be of some help.
If you are having problems filing returns, check the service availability page, and the register of current online issues before going any further to see whether it is a known problem. HMRC will post to this page regualrly in January if there are service problems.
Online services helpdesk number : 0845 60 55 999
Or email at email@example.com
HMRC tips on online security were published in the summer of 2009 following breaches of security in the SA online systems. The index page is here - link to the various pages from this menu.
Details of the current "phishing" emails and advice on what to do are shown here. As a general point you should ensure that you have advised your clients that HMRC will never contact them by email and they should not respond to any contact of this nature purporting to be from the tax authority. The current round of emails do not request bank details, but request taxpayers to log onto their HMRC online account - thus capturing valuable log on details.
Paper returns may be filed for cases where it is not possible to file online. This includes the 'excluded cases' and other taxpayers unable to file online, such as those without a UTR. For excluded cases, no penalty will apply. For other taxpayers you will need to ensure that the tax is paid by 31 January to cap the penalty at nil.
If you wish to file computer-generated output this is permissable, but you will need to check that your software provider produces identical output. You should print the return in 'greyscale' and not black and white. The HMRC guidance for agents on printed returns from computers is here.
The online authorisation service should be the quickest way to get registered to act for a client, although turn around times for paper 64-8's have been very quick in the last few months of 2009 (details below). The linked page includes some background to this service. To access it just log on as agent and select 'Authorise Client' from the menu. You will need a UTR for the client before you can use the online service.
If you are using third party software you can "File only", without a 64-8 being completed. However, this will not give you access to your new client's files or previous tax information held by HMRC.
Paper 64-8 procedure and turnaround times (January 2010)
Paper 64-8 as PDF form (cannot be saved) is here. You must show at least one of the UTR and NI number, as without either, HMRC will not process the return. The reasons are given in this article dated December 2009. You should also quote your agent code on the 64-8 - this system is now run centrally at CAAT by the Agent Maintainer - this HMRC article describes the system.
The current HMRC service message regarding paper 64-8 is as follows : "The Central Agent Authorisation Team (CAAT) aim to deal with paper forms 64-8 for Self Assessment authorisations within 24 hours of receipt in CAAT (Monday to Friday). This means you can call the Agent Dedicated Line as soon as CAAT have updated the Self Assessment record. Updating HMRC’s electronic systems can take a bit longer and full online functionality will be enabled within three working days. CAAT aim to process other authorisations within seven working days of receipt."
Working Together issue 33 (published in November 2008) covered some '64-8 Myths and legends' which may resolve some issues. This includes general advice about where to send the forms etc.
Unique Taxpayer Reference numbers (UTR's)
Clients without a UTR
Clients without a UTR but who need to file a return are very likely to have a failure to notify issue and consequent penalties (see above). You will not be able to file their return online, and will need to make a return on paper. Follow the guidance above regarding payment of tax by 31 January to limit penalties to zero. Taxpayers with self employment income in 2008-09 should notifty liability on form CWF1, and those with tax due under self assessment but no self employment should use form SA1. In both cases, the forms are now submitted to HMRC processing centre at CAAT Longbenton. Partnership registration and new partners joining existing firms should also notify Longbenton. If you do not have a UTR for a client you must quote their NI number on form 64-8 as without either, HMRC will not process applications.
Partners without a UTR
Where one or more partners do not have a UTR the partnership return will be rejected. Follow the advice above regarding obtaining a UTR. The partnership return may have been issued to the remaining partners in time, so a late filing penalty may be due in this situation as the return will have to be filed on paper if no UTR is received in time.