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CGT: Can now download 60-day reporting form | accountingweb
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CGT 60-day reporting paper forms now online

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HMRC has at last responded to requests and made a paper version of the capital gains tax on property disposal return available to download for those who cannot file online.

3rd Mar 2023
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Nearly three years after the capital gains tax on ​​property disposal (CGT PPD) return was introduced for in-year reporting of property gains, HMRC has finally made the paper version of that return available to download.

Where taxable gains arise on UK residential property in 2020/21 or later, the gain needs to be reported to HMRC through the online UK property reporting service. This return must be submitted within 60 days of the completion date (originally 30 days) for sales completed before 27 October 2021

Non-resident vendors need to report using the same online service, any disposal they make of UK land or property, residential or commercial, held directly or indirectly, whether or not a gain has been made. 

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Replies (13)

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By justsotax
03rd Mar 2023 17:01

PPD reference, when requested on phone the paper versions issued that I have seen never included these anyway. Since then I have submitted copy paper forms - as there is no unique reference issued when the Revenue send out the form.......quite ridiculous....anyway so far they have never queried the forms being submitted.....but it is sufficient to say this has been one long shambles.....

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Replying to justsotax:
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By Geoff56
05th Mar 2023 07:53

I have completed all my returns on paper and in each case, a reference was only sent to the client after the return had been processed, to enable the client to make the payment. In fact, those forms contained an instruction not to pay, until a reference had been issued.

When the paper forms are issued in response to a telephone request, I have always found the UTR printed in tiny numbers along the edge of the page, but no other reference. Not easy to spot. It's a while since I completed one, so I cannot be certain this has still been happening.

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Replying to Geoff56:
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By Hugo Fair
05th Mar 2023 12:12

"When the paper forms are issued in response to a telephone request, I have always found the UTR printed in tiny numbers along the edge of the page"
... which is why I've always been incredulous at the oft repeated suggestion from some on here that an agent should acquire a blank copy (of any HMRC form not just this one) and then just keep photocopying it for use with different clients.

With increased digitalisation it becomes ever harder to spot data values (smaller font, different location, then barcodes and QR codes) so you cannot be sure that you've anonymised the form.

This was the basis of one of the first generic computer-based frauds in the early '70s.
* Banks had always provided at their branches a number of single-sheet blank paying-in slips;
* Then they started to include a few at the back of cheque-books for you to tear and use instead;
* This 2nd variety had your account details pre-populated (using special characters that could be read automatically via OCR);
* However the OCR figures weren't printed in the usual boxes (sort code, a/c no etc) but in a string across the bottom of the slip.

So some bright criminally minded individual tore out the slips from the back of her/his cheque-book and inserted them at random places in the piles of blank ones for general customer service ... and waited!
In due course random amounts of money appeared in their account - put there by people who hadn't noticed the OCR figures and had completed by hand *their* details (which were ignored by the automated readers who happily used the OCR)!

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Replying to Hugo Fair:
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By justsotax
06th Mar 2023 15:12

The Revenue want to discourage the use of the paper return - so whilst I am sure you have some valid concerns the fact that they issue a declaration without the CGT reference seems to miss the whole point of being required to phone up for what on the face of it should be a form unique to that client.

(and of course not everyone who needs to complete a declaration has an SA record).

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By Hugo Fair
03rd Mar 2023 18:31

Is there any legislative basis for HMRC's demand that "a CGT PPD account reference must be included on the paper return"?

It reeks of petty spitefulness ...

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Replying to Hugo Fair:
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By richard thomas
03rd Mar 2023 21:28

Hugo

Another of your simple questions that needs thinking about in depth before it is answered. Allied to this is the legality of HMRC's insistence that only those who meet one of the 10 criteria that Rebecca refers to "should" make a paper return, not to mention the questionable legality of the online return itself.

It so happens that I have researched this area going back to 1803 or earlier (the results of some it are in the Chapter "Forms and formalities" in Volume 10 of Studies in the History of Tax Law (Hart, Oxford 2021) and I also have an academic interest in electronic communication with and by HMRC, but it may take me a day or two to put my thoughts together in a coherent way.

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By richard thomas
04th Mar 2023 17:54

Paragraph 16 of Schedule 2 to FA 2019 says:

“A return under this Schedule—

(a) must contain information of a description specified by an officer of
Revenue and Customs (and different descriptions of information
may be specified for different cases), and

(b) must include a declaration by the person making it that the return is,
to the best of the person’s knowledge, correct and complete.”

To my mind that does not include what is known (at least in the MTD ITSA Regulations and directions) as designatory information, but only the information about the actual disposal. I derive that from the ability of an officer (see paragraph (a)) to specify different information in different cases, so here for non-resident cases, for trust and estate cases, for those cases where tax had to be paid etc.

Paragraph 16 is not the only relevant provision. Section 113(1) TMA says:

“(1) Any returns under the Taxes Acts shall be in such form as the Board prescribe, and in prescribing income tax forms under this subsection the Board shall have regard to the desirability of securing, so far as may be possible, that no person shall be required to make more than one return annually of the sources of his income and the amounts derived therefrom.”

Again this seems to me to be about the form of the information to be provided which assists in showing the amount of tax to be charged. What it was aimed at was preventing the assessor for a parish in which a trade was carried on sending a return to a person while another assessor for a parish where a property was occupied by that person, and yet another where his residence was in a different parish, each only asking for separate bits of information about just the trade etc.

The designatory information is important of course in enabling the return to be linked with a file or record, and failure to give it may result in inconvenience like penalties being issued for failure to file when the return was in fact received by HMRC, or interest and penalties being charged on outstanding tax when it was in fact paid to HMRC, but no penalties can be issued for an incorrect return if the designatory information is omitted, as it does not lead to a loss of tax.

There is of course a possible difference as between electronic returns and paper ones. HMRC cannot prevent a paper return being delivered to them, even if it is incomplete in any respect. They can, and do, prevent an electronic return being delivered to them if boxes are not filled. But this does not apply to what are labelled “optional” boxes. I do not know if there is a question in the online return abouyt this, or if it uses the words “if applicable” (so is optional) as to which see the next bit.

The paper form that is now available to download has the following entry above a box on page 3:

“Capital Gains Tax on UK property account reference number *if applicable*.”

On page 4 one is asked to say if it is a new UK property return, and before you can wonder what “new” means in this context, it tells you by giving you the chance to say:

“No, this is an amendment to a previous return”.

But if you do say no, then it says:

“If this is an amendment, tell us the Capital Gains Tax on UK property return reference number of the original return”

without anything to qualify the answer if it was not applicable.

Nothing however explains, despite the first two pages being explanatory, in what circumstances the property account reference number is applicable.

In my view the words I have emphasised from the paper return (“if applicable”) show that HMRC are wrong. What does “if applicable” mean? If HMRC are right and you must complete the box, then there is no room for “if applicable”, which clearly assumes that there are circumstances when the box does not have to be completed. The obvious circumstance is where you haven’t got a reference because you either haven’t applied for an account, or you have applied but haven’t yet got one.

In the absence of explanatory notes one has to turn to the guidance Rebecca refers to in CG App 18C. This shows at page 100 that, as might be expected, you have to have a CGT on UK Property Account to be able to file a return online. And HMRC guidance on gov.uk https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-sold-a-p... says that you get an account by going online. It then says if you cannot use the (online) service to get one you can get a paper return! So in that situation the question in the box is inapplicable.

The answer to Hugo’s question is that the quoted statement from HMRC may be petty spitefulness, but it is definitely wrong. Where does it come from, though?

I cannot though see in App 18C any reference to the requirement from HMRC that Hugo objects to. Nor is it in the HMRC letter to the ATT on their website. Perhaps Rebecca could say where it comes from.

It’s another prime example of HMRC saying something that is wrong or misleading as if it was the law. And as I have suggested in my interim response this area is rife with such statements. Take the letter from the ATT of 23 February on their website news:

“There is a caveat to this. HMRC consider that the existing online service is the most secure and efficient way to notify HMRC of a residential property disposal and pay the CT that is due. Consequently, the form is being made available to download on a trial basis. This trial will allow us to make sure that the service is properly designed and to ensure that customers are only using the paper form when they can't use the existing digital route”

I accept that the online service may be more “efficient”, certainly for HMRC but not for the digitally excluded. But “most secure”? Given the safeguards that are required by the Electronic Communications (EC) Regulations 2003 for s 8 TMA returns and the fact that these returns are not governed by those or any EC Regulations (as HMRC have confirmed to me in answer to a FOIA request) it is very doubtful if the online service is the most secure way it could be done.

And how does that statement lead logically to the consequence that the form is being made downloadable on a trial basis? It doesn’t, because the next part gives the game away. They are only trialling it because if the wrong sort of customer tries to use it, they will take their toy away.

HMRC will, or certainly ought, to know that the online return is not mandatory. For an example of what is needed to make it so, see regulation 3(2A) to (2C) of the 2003 EC Regulations or the EC part of the PAYE Regulations. Incidentally the 10 criteria don’t seem to include those whose religion prevents them using computers (unless they count as digitally excluded when it is their choice, not because of their inability to use them or their lack of access to one), whereas all other mandatory requirements to do something online do exclude them, including for RTI.

Thus statements like that in paragraph 1.13 of CG App18 are weaselly in the extreme, almost stoat-like (I like stoats by the way – my wife and I were enchanted by one by the side of a beck in Yorkshire last week where I was photographing Dippers) when they say:

“Paper returns *should* be made only in the following circumstances, where the person reporting the disposal is: [10 criteria]”

They know that they cannot legally say “must”, but hope that “should” will imply that the statement is legally binding.

And why do I say that the online return is of doubtful legality? It is because of its omission from the 2003 EC Regulations. I cannot see why it was not included – only last week amending regulations were laid to include simple assessments and oddly a paragraph 4 Schedule 55 FA 2009 (daily penalties) notice warning of penalties.

Why did HMRC see a need to include in law all forms of electronic communication to and from HMRC in the field of income tax and allied s 8 matters and of CT returns, including enquiries, closure notices and assessments in the regulations which contain many safeguards and authorisations as well as permissions about service etc, and to do the same for IHT, SDLT and PAYE but not this one?

Thanks (8)
Replying to richard thomas:
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By Geoff56
05th Mar 2023 07:40

Brilliant exposition, Richard.

"HMRC will, or certainly ought, to know that the online return is not mandatory."

"They know that they cannot legally say “must”, but hope that “should” will imply that the statement is legally binding."

I have always maintained this, but could not express it with your technical analysis.

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Replying to Geoff56:
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By Hugo Fair
05th Mar 2023 13:06

Indeed, erudite yet easy to follow (as always) .. and I enjoyed the invention of 'stoat words' - a particularly apposite descriptor for HMRC's opaque guidance.

I rather like the juxtaposition you've achieved between Richard's "will, or certainly ought, to" and HMRC's "should".
They would no doubt have substituted 'should' in Richard's wording - thereby losing all nuance let alone clarity of meaning.

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Morph
By kevinringer
06th Mar 2023 09:49

Making the PPDCGT forms available online is a sticking plaster, not a solution. Most of my clients are digitally excluded (HMRC have granted MTD VAT exemption to over half of them). Though they are digitally excluded, I am not and have been filing digital Tax Returns for 100% of my clients since 1998. Though I can file digitally SA returns, I can't file digital CGT because my clients are digitally excluded and can't authorise me, and most CGT clients are elderly and can't face the phone authorisation route. Being able to download the PPDCGT form will make it easier, but it isn't the solution. The solution is for me to be able to file on behalf of my 64-8 clients without having to obtain separate authorisation.

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Morph
By kevinringer
06th Mar 2023 09:59

"HMRC has made it clear that a CGT PPD account reference must be included on the paper return. This is to ensure the CGT PPD report and payment is matched with the correct taxpayer’s records. HMRC added: “Taxpayers may need to take steps to obtain this reference before filling in the return.”"

I've looked at the PPDCGT forms I have received from HMRC. None have stated the CGT reference. Most only state the NINO, some also state the UTR. Some don't state any references at all. That's because HMRC only create the reference when they process the form, not when they issue the form.

Note the download form says:

"Capital Gains Tax on UK property account reference number if applicable"

It says the same "if applicable" for UTR and NINO.

I will continue to file without the reference because HMRC has accepted all my forms for the last 3 years. If HMRC insist on a reference, they need to give agents the ability to file using the existing 64-8 authorisation.

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Morph
By kevinringer
06th Mar 2023 10:04

60-day CGT is a classic case of HMRC red tape gone wild. Every case I have been involved with was already in SA and had to declare the gain anyway through SA. So all that 60-day CGT has achieved is the CGT is paid sooner. But as 95% of my declarations to date have been on paper, the cost to HMRC of processing 60-day CGT has been far greater than the benefit of receiving the tax sooner. Does anyone know what the actual cost of implementing 60-day CGT has been, and what extra tax it has generated, if any?

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By Ian McTernan CTA
06th Mar 2023 12:46

Finally a tiny slice of common sense...

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