CGT property reporting still has problemsby
HMRC has been working to tackle some of the problems with the UK property reporting service, but solving those issues is ‘challenging’ as Helen Thornley reports.
The rules require taxpayers to both file and pay their CGT within 30 days of completion, but those filing on paper need to receive a payment reference from HMRC before they can make a payment. Taxpayers who file online can pay immediately via the UK property service.
To ensure that paper filers are not disadvantaged by waiting of the reference number, HMRC ‘stops the clock’ on receipt of a paper form, so that their processing time doesn’t count towards the 30-day window. However, rather than start the clock ticking again after processing, paper filers instead get a fixed period of 14 days to pay from the date of the demand issued by HMRC.
This 14-day period has been creating practical problems for taxpayers. Post from HMRC can take seven to 10 days to reach the taxpayer, then a cheque must be posted back, so even if the taxpayer can react immediately when the demand lands; 14 days was not enough for many people. HMRC took these points on board, and now most paper filers will be able to pay within 30 days of their demand arriving.
Delays processing paper forms
There is still limited progress over when a paper filer can expect the demand to arrive in the first place, as agents continue to report processing delays with paper returns.
HMRC has acknowledged there are delays, but the ATT is continuing to press for more detail over the timescales involved. It’s hard for agents if they can’t say to a client when they can expect a response – and both agent and HMRC time is wasted following up progress.
I’d be really interested to hear what sort of processing times AccountingWEB readers are experiencing.
Interaction of self assessment and CGT reporting
As I discussed in July, the interaction between the CGT property reporting rules and self assessment is extremely challenging because the CGT property service is a standalone system. This is a problem when the CGT paid in-year via the service is found later to be excessive and a refund is needed.
Where the amendment can only be done via self assessment (for example to offset losses on other disposals arising after completion), a somewhat clunky workaround involves calling HMRC to get funds transferred from one system to another, before any overpayment can be returned or offset against other self-assessment liabilities.
Where it is permitted to change valuation estimates or make an amendment via the property reporting service itself, provided this is done online and the CGT was originally paid by debit card, a refund should be automatically processed.
This put taxpayers who didn’t pay by card at a disadvantage. However, HMRC has recently suggested that it might be possible to upload the bank details in a separate document and that the system will prompt users to do this. Feedback from anyone who has succeeded in getting a refund this way would be welcome.
In the meantime, HMRC is still looking at what, if anything, it can do to improve the repayment mechanism for future years but the ATT understands that this is proving challenging.
Register for free to continue reading
It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:
View all AccountingWEB content
Comment on articles
Watch our digital shows and more
Access content now
You might also be interested in
Helen Thornley has a focus on personal and capital taxes. Initially training as an accountant before moving to tax, she worked in practice until her appointment as a technical officer in 2017. She also has an interest in the history of tax.