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Taxfiler producing erroneous TR for non residents

Taxfiler not including 7.5% dividend repayment

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We filed a 17/18 return for a non resident on time, and several months later, the client received a SA302MM from HMRC saying "We have reviewed your record and found that your previous calculation was not correct. We are very sorry that this has happened and apologise for the inconvenience we have caused you." They enclosed a new calculation and a refund cheque.

We queried this with Taxfiler, and Taxfiler claimed that the discrepancy was due to "this 7.5% dividend repayment for non residents was an unanticipated consequence of a change in tax law. This was not recognised in 2017-18 and so the HMRC tax algorithms did not build in for this. However in 2018-19 this was recognised and so the tax situation now shows correctly on the calculation, however there have been a few corrections to past tax calculations. If we don't follow HMRC's algorithm then you cannot submit electronically. There are times when we will spot this and we will recommend a paper return, but this was not the case this time - nor I believe for any of the tax providers."

I forgot all about this exchange, and filed 2018/19 with Taxfiler. We have now received the same letter and correction from HMRC.

I appreciate that it was my responsibility to have checked the return properly (at least the second time), but am frustrated that Taxfiler have not fixed the problem, or, if it really is an error with HMRC's algorithm, blocked these returns from being filed electronically, after I made them aware a year ago.

To make matters worse, I can't even email Taxfiler as my emails are bouncing back as being Spam. I've called the Sales phone number and am waiting for a call back from a manager.

 

 

Replies (5)

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By jon_griffey
17th Sep 2020 15:08

As a non-resident, are the dividends not excluded income'?

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Replying to jon_griffey:
By aiwalters
17th Sep 2020 15:21

They are excluded, (optionally, as sometimes it is best to do the normal way to avoid losing the Personal Allowance), but a deduction should still be given for the 7.5% tax credit.

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By frankfx
17th Sep 2020 15:30

I recall Tim Good raising issues around this subject.
We simply have sooooo much to check.
That it's a sad day tax software is' deliberately' wrong to be compliant!

Software fails to alert the user with a wake up wake up warning!
That would be s good service.

We then have an interesting discussion with client.

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Replying to frankfx:
By aiwalters
17th Sep 2020 15:35

Yep. I am about to have my 'interesting discussion' with the client, for the second year in a row.

I'm most annoyed that Taxfiler last year said it would be sorted by this year. I wonder if it is even true that the HMRC algorithm is wrong.

Do you have a link to Tim Good's post as I can't seem to find it

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Replying to aiwalters:
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By frankfx
17th Sep 2020 16:32

https://www.taxadvisermagazine.com/article/riding-tax-rollercoaster

there are other references

he has been campaigning about HMRC failings in this area.

Software houses pick upthe pieces

But same software teams fail to make the message clear to users, we are overwhelmed as it is.

He may have info on his own website absolute tax / blogs.

BUT IRIS TAXFILER will have a knowldegebase on this.

If only to demonstrate to client that tax is a mess..... and HMRC can not readily fix thier own problems.

Just think of the NHS consultants who were being penalised for paying too much into Pension Plans...... March 2020 budget attempted to rectify that.

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