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Amend SATR, for interest?

Should we send an Amended Tax Return , for interest, which is below the £500 taxable

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Hi all

 We've just been informed of an account , bearing interest of approx £200 pa,  way below the £500 taxable for the Higher Rate client. There is absolutly no effect on liablity , should we send amended SATR , the relevant returns are 2018/19 & 2019/20.

 Please let us have comments 

.thanks.

Replies (12)

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By claudialowe
13th Oct 2021 12:50

Last year a client of mine had a "gentle enquiry" into his tax return, and it transpired that there was £50.00 interest missing - again no loss.......

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Replying to claudialowe:
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By Hugo Fair
13th Oct 2021 12:53

What happened to the concept of 'de minimis'?
Indeed, what was the outcome of the gentle enquiry in terms of required actions (now or in the future)?

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Replying to claudialowe:
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By Paul Crowley
13th Oct 2021 13:38

He forgot the £50 that HMRC know about
Could he also have forgotten other accounts and income that HMRC do not know about?
Letter from HMRC justified as they may not know about the other omitted income, particularly if the account was held overseas

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By Paul D Utherone
13th Oct 2021 13:04

I would probably send a letter to say:

"We have been advised of interest received for the years of 2018/19 & 2019/20 not included in totals shown in the returns for those years. As the total interest received including this remain below the Savings Allowance for each year, and no additional tax is payable we do not intend to submit amended returns for these years"

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By Paul Crowley
13th Oct 2021 13:29

I would do nothing unless there is a change to the tax liability
I would make sure it was on future returns only

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By JCTS
13th Oct 2021 13:41

Thank you all

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By HamishMackrell
13th Oct 2021 14:27

The HMRC get this information from the banks. If it is omitted by a taxpayer the tax return is incomplete or can be regarded as defective. The taxpayer signs off something that leaves something out means HMRC has grounds for suspicion. For the safety of one's reputation withy HMRC I would recommend you amend the incomplete tax return. But make sure client agrees. Otherwise an unnecessary enquiry starts or could get going.

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By HamishMackrell
13th Oct 2021 14:28

The HMRC get this information from the banks. If it is omitted by a taxpayer the tax return is incomplete or can be regarded as defective. The taxpayer signs off something that leaves something out means HMRC has grounds for suspicion. For the safety of one's reputation withy HMRC I would recommend you amend the incomplete tax return. But make sure client agrees. Otherwise an unnecessary enquiry starts or could get going.

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By Not Anonymous
13th Oct 2021 18:56

£200 interest taxed at 0% can easily increase the overall liability.

Could reduce the Personal Allowance or Married Couple's Allowance due (if relevant) or increase the High Income Child Benefit Charge for the year.

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By claudialowe
14th Oct 2021 08:21

With my client, enquiry closed quite quickly. Savings account was in the UK not overseas.

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By fawltybasil2575
14th Oct 2021 11:24

@ JCTS (OP).

Whilst respecting the above replies, my view is that your question is fully answered by the PCRT, Helpsheet C thereof being here:-

https://www.att.org.uk/sites/default/files/C_Errors_helpsheet_1_March_20...

In short (under paragraph 16 of Helpsheet C):-

(i) No amendment is required to the 2019/20 Tax Return.

(ii) No formal amendment can be made to the 2018/19 Tax Return since such amendment became “out of time” on 1 February 2021 (assuming the Tax Return was issued and filed within the normal time frames).

There is certainly no harm however in submitting a non-statutory letter to HMRC, along the lines of :-

“There were inadvertent omissions, from the 2018/19 and 2019/20 Tax Returns, of Untaxed Interest as follows:-

2018/19 - XXXX
2019/20 - XXXX

In both cases, the Income Tax payable is unaffected (hence, in relation to the 2019/20 Tax Return, and in accordance with Helpsheet C of the PCRT, no formal amendment is being made to that Return).

If the understated Untaxed Interest is considered material, submitting such a letter may assist, as has been stated by earlier posters. The reason is that if and when HMRC are advised by the “Interest payer” of such Untaxed Interest figure, this may possibly give HMRC doubts as to the veracity of other aspects of the Tax Returns.

Basil.

Thanks (1)
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By bernard michael
14th Oct 2021 12:13

I've just had a similar problem. Client thought all her income was derived from her ISA. I found out it wasn't .

I submitted an amended return for 2019-20 and sent a letter about 2015-16 onwards. The tax effect is minimal but the possibility of a fine could be more trouble than a first class stamp.

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