Construction industry client brought a (previously lost) tax deduction certificate for 2015-16 today, so I will need to submit an amended 2016 tax return. Will there be late penalties for a corrected tax return?
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No.
HMRC don't care if your returns are correct. They're just interested in you filling the forms in on time.
You presumably filed the original on time.
The penalty, if any, will be tax based on the error in the original and tax lost, subject to mitigation within the bandings, and not an issue of late filing.
What is the net effect of the change allowing for the CIS tax deducted? If it's a refund there should be no penalty. If tax is due then amend the return and get the client to pay the tax (and additional POA) immediately & without waiting for a demand and one would hope that as an unprompted disclosure any penalty would be at the lowest end if not nil
https://www.gov.uk/guidance/penalties-an-overview-for-agents-and-adviser...
https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch82000
2016 return was filed on time.
The gross sale was £750, CIS tax was £150. I originally recorded (non-CIS) sales of £600.
Amending: Sales will increase by £150 as will tax already paid.
Deducting 20%tax and 9%NIC the client should receive £106.50.
Have I missed anything here?
On the face of it then I do not think that there can be a penalty.
Amend the return. Explain why the amendment is being made in the white space, noting that the income was returned based on records of receipts but the CIS cert has now been traced showing additional income with associated tax credit, and that the amendment gives rise to a refund of tax. Claim the refund & that should be the end of it
