There are still a number of returns that can’t be filed online. Rebecca Cave explains where to go and what to do if you encounter this problem.
You are under pressure to get those last few self assessment tax returns in to HMRC, when suddenly your tax return software spits out an error message: “Not able to file online.”
The air turns blue, but what can you do? If you submit the tax return in paper form now your client will get a late filing penalty.
There are still around 20 circumstances in which the HMRC system will not accept the data from self assessment tax returns filed online, irrespective of the software used to compile the return.
It is well known that self assessment tax returns for MPs can’t be filed online, so a paper return must be submitted, but the MPs are given until 31 January to get their return to the specialised HMRC office which deal with their returns. The same digital restriction and extension of filing period applies for members of the Scottish Parliament, Welsh Assembly and Northern Ireland Assembly - all the in name of increased security.
In other cases the HMRC system has not been programmed to cope with all the little foibles of the UK tax system, so it throws up a computation error and rejects the return.
For example:
- a minister of religion (form SA201M) has left his ministerial post in the year but has also received more than £8,500 in earnings during the same tax year
- the taxpayer has pre-incorporation losses and other losses or loan interest which collectively exceed the cap of £50,000; and
- a non-resident taxpayer has made Gift Aid donations, but has paid insufficient tax in the year to cover the Gift Aid.
You will also have problems where the tax return has a lot of schedules attached, probably more than 50, but this cap varies for the type of SA return.
If you come up against one of those situations where the computer say “no”, the only way forward is to submit a paper tax return. But to avoid an automatic late filing penalty you need to supply HMRC with a reasonable excuse, which is of-course the fact the HMRC can’t programme their systems correctly!
To prove this you need to print out the error message supplied by your tax return software, or copy that message into box 6 of the special HMRC reasonable excuse form for not being able to file online.
The best approach is to submit this reasonable excuse form attached to the paper tax return, having clearly marked it with the taxpayer’s name and UTR number. However, you can submit the reasonable excuse form separately, where for instance the return needs to be sent via the taxpayer to be signed. In all cases the tax return must reach HMRC by 31 January.
Rebecca Cave is the author of 'Capital Gains Tax Reliefs for SMEs and Entrepreneurs 2014/15' published by Bloomsbury Professional.