Phantom returns haunt tax season
HMRC says it is receiving “large numbers” of self assessment returns filed as amendments. What could be causing this strange phenomenon?
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Genius. So the gateway can and does check if an original return is held, and uses this information to reject a return if it's a duplicate. So it's either a design decision or basic lack of competence, rather than a system limitation, that has prompted them to accept amended returns when no original is held.
I've had a case. I successfully filed a return using PTP. The client didn't receive a demand. I checked online account and noticed the account said nothing was payable. I phoned HMRC. It turned out HMRC had captured a nil return the same day the system accepted my return. My return was also an original so that had not replaced HMRC's nil return. HMRC agreed they had made a mistake so HMRC unlogged the nil return but that also unlogged my return. HMRC asked me to file my return again. I did, but the software sent it as an amended one because as far as the software was concerned I had successfully filed the original one. A few days later I phoned HMRC. They said my amended one could not be captured because HMRC had removed the original. PTP permits you to alter the original/amended status so I refiled as an original but HMRC rejected it because there had already been an original! I spoke to HMRC yet again. They said they have to refer it and it'll take a week to fix. I waited a week but still not fixed.
had exactly the same situation just this week, managed, finally to speak to a very helpful chap on the agent line who actually took all the information from the tax return over the phone & captured it - checked today & all is as it should be.
This scary. I still have returns coming in for completion and so if this happens.......... fines no doubt with the client blaming me despite several reminders. Hope you get sorted
There won't be fines because you have proof you filed: though HMRC may issue a fine and you'll have to appeal.
I've asked HMRC a question on the forum - why do returns have to have an 'original' or 'amended' status at all. When we submit a return the entire return is transmitted. I don't know how HMRC deal with it but we deal with as a whole new return. HMRC should accept the data as it is and if HMRC have already had a return HMRC should simply process it as an amendment and if HMRC have not already had a return HMRC should process it as an original.
When we send an amended RTI I'm not aware of this being transmitted with 'amended' status. Isn't it a case the whole RTI is re-transmitted as a new original?
I'd be interested in knowing what they say, since it's fundamentally easier (both practically and programmatically) to do it that way.
For RTI Full Payment Submissions filed during the tax year*, there isn't a flag to say it is an amendment**. However, if it is amending an earlier FPS, the "this period" figures in the return should be the differences from the previously filed figures. I don't know what the impact is of getting this wrong - possibly incorrect Universal Credit payments? The return also includes Year To Date totals, which aren't subject to this rule.
Our software (and hopefully other software) works out the differences automatically, where the original was filed the same way.
* Earlier Year Updates can be filed after the end of the tax year and they are amendments.
** There is a late reporting reason code for amendments but, as far as I'm aware, that only affects penalties.
"...most notably when marriage allowance relief is **claimed on one tax return**. If the taxpayer’s **partner** has not completed the marriage allowance transfer claim by phone, letter or online, this could cause a delay, the department warned."
Whether the partner isn't, is or will be the elector, there is nothing to be "claimed on one tax return", John.
Although you are correct in that there is no box to tick, the tax due on any submitted return will be wrong if the partner's election is not made.
The return will be accepted with this"incorrect" figure but it is likely to lead to HMRC issuing a correction. Better to get this resolved first. The advice with this has always been to get the partners return in first (if applicable) or to get the application made. This makes good sense.
Mike
No, the potential beneficiary's calculation will be correct, but the statement of account may not be as expected - until sometime after the election is made.
The one and only action required of the two tax-payers is that one - the right one - should elect for MAT. So it is the first - and the last - thing they should do... ;)
HMRC don't specify to which year the amendments relate. I've certainly filed two amended 17/18 returns recently because when completing the 18/19 returns I noticed minor errors. They didn't affect the liabilities concerned but in one case I failed to complete the "loss carried forward" box on a furnished holiday let. I'm therefore owning up to contributing to HMRC's observations and apologise for the panic.
Thomas, I don't think HMRC are commenting on genuine amended returns such as what you have filed. They're commenting on returns filed as amendments for 2018-19 when an original has not been filed.