Timing is crucial for property returns and self assessment
HMRC has confirmed that taxpayers who have omitted to file a property return under the so-called 60-day reporting rules must still file any missing returns now, even if they have gone on to report the disposal on their self assessment return.
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There should be no daily £10 late filing penalties. See: https://www.accountingweb.co.uk/any-answers/penalties-for-late-filing-an...
See also this now famous thread: https://www.accountingweb.co.uk/any-answers/missed-cgt-report?page=1
Assume they insist on this to bring forward the CGT payment date from Jan.
But for as long as the UK Property Account and the TR do not (successfully) interact and offset with one another, what is the point?
Seems like quite aggressive penalty farming to me.
There is no *tax raising* reason to pursue this given the client has paid the right amount of tax in the end, albeit a little late.
The only real rationale seems to be to penalise those not jumping through all the slippery hoops that now makes up our tax system and now make up a new manual process to cover the fact that the original process is in effect a very poor one and badly specified at the design phase. It also highlights the lack of basic competence at HMRC to make the necessary system changes. 'Agile development' this is not. Given this system is supposed to be how the whole MTD project is going to run (piecemeal filings very quickly after deadlines) this really does not bode well at all.
They would do much better simply abandoning this failed experiment. There seems to be a huge cost here for tax payers and HMRC to achieve nothing more than a mild acceleration of tax receipts.
Spot on.
How else will their systems automatically trigger the penalties? HMRC do not have the resources to check everyone in any other way.
HMRC happily trigger as many penalties as possible automatically and leave it to the taxpayer to appeal or contest. Much easier and more likely they would generate at least some extra funds in doing so.
Good summary of the current status/chaos, Helen, and your parting shot "The whole scenario serves only to reinforce my previous grumbles about the difficulties of trying to make an annual tax into a transaction tax" is spot on.
Whether or not HMRC is sufficiently self-aware to realise it, they have become committed to the concept of taxation at the point of transaction ... but are still trying to maintain all their records on an annual basis. See PAYE for the simplest/clearest example, but it's creeping into everything.
Which is yet another reason why MTD for IT will come a cropper.
HMRC is failing to tackle the fact that their back-end (databases and associated maintenance routines) are not fit for purpose in an increasingly real-time/transactional reporting environment - and any amount of ensuing sticky-tape/guidance reviews/updates/etc won't hide the failings that impact both taxpayers and tax-collection.
What a stupid HMRC answer to a stupid problem caused by HMRC
Sounds like the monkeys are now running the zoo, throwing poo at anything that does not give out bananas.
If a person is ordinarily in self-assessment, the 60 day reporting just seems ridiculous when the same information has to be reported on the return anyway.
Ultimately this is the taxpayers responsibility to report but how many will know about it ? Surely the conveyancing solicitor should be taking responsibility ? Often agents will not even become aware of this until the client asks for their next tax return to be filed . Another layer of unnecessary bureaucracy if a taxpayer is already register for self assessment .
HMRC needs gutting and starting again, there needs to also be a government minister responsible for HMRC.
It would appear to be run by idiots for the benefit of anyone other than the people it is supposed to serve.
Ok, so who wants their client to be the guinea pig and file their overdue Return and see what penalties arise, and whether HMRC will strictly impose?
What is the position for a Tax Payer, who have Capital Gains on current property transactions, but which are less than Capital Losses brought forward. The understanding was that one did not need to report it as there would not be ant CGT payable. Is the position still the same or has one got to to still the Transaction Reports irrespectively.
Looks like another example of HMRC making things up as they go along.
The crunch in this fiasco lies within Helen's quotation marks .......''contact HMRC''......and having to TELEPHONE the Revenue to obtain the necessary paper Return { PPDCGT }.
If this isn't guaranteed to cause an inordinate delay :-
[a] in view of HMRC's track record of a third world telephone operating system,
[b] the ensuing delay in issuing the bit of paper by a Govt department, at least a quarter of a year in arrears,
then tell me what is !!
My understanding is that if a loss is made, it doesn't need to be reported through the separate portal, it can be reported on a tax return as normal.
Once again HMRC completely off the rails and not being managed by 'the treasury'
Someone in government needs to get a grip!
No idea about the issues it causes
No foresight into problems that will occur when they bring out new initiatives
Completely sub standard IT architecture & processes
The list goes on, it's not acceptable
Clients completed on sale of property in March 2022 and gain included on full SA returns submitted in May 2022 - within 60 days of completion. Tax inclusive of cgt due January 2023.
So, as I understand it, the current view from HMRC is that everyone with a tax liability (plus NR vendors with no gain) needs to do the separate cgt return as well as the SA return - except they don't in the situation that my clients had. HMRC wants everyone to pay the tax on the capital gain within 60 days of completion - except they don't in the situation that my clients had. Anyone who has submitted the gain on a SA return without previously doing the separate capital gain return now needs to do a paper capital gain return - except they don't in the situation that my clients had.
Hopefully HMRC will soon do a TV advert for this explaining how simple it is.
I have a couple of follow up questions if I may, for my client the disposal is in 22/23, and is 'on time', so all good. Except it's my first time!
Firstly HMRC guidance is that the client needs to set up an account anyway, then I add the clients "account number" to my agency (ASA), then the client authorises.
As I can't see what the client sees (when setting up an account), I'm presuming the "account number" will be clearly visible to the client at some point, and is not their Gateway ID, is my assumption correct?
Secondly, in view of all the details the client has to input to set up the account, (and I can't see the screens) aren't they going to say "what is the point of me paying you to do it if I have to enter all this myself?".
TIA.
If you're seeking answers to specific questions, then it would be better to post within the Any Answers section ... more frequently scanned/read by those willing to respond than by readers of these 'news' articles.
Thank you, yes I know, and have often. On this occasion my thought was 'here's some contributors who have experience of this particular subject'.
Just ask for a paper return; it is so much simpler. I have done all mine this way. Your client does not have to be digitally excluded; anyone can choose to make their return by paper.
"HMRC are stuck between a rock and a hard place"
HMRC's position is entirely of their own making for failing to think this regime through. HMRC ran a very limited "pilot" which only engaged with the willing and completely failed to engage with the digitally-challenged, the digitally-excluded and those who avoid HMRC like the plague. HMRC also failed to engage with estate agents and solicitors with the result that awareness is nil. I've just been approached by a solicitor who runs an estate with another solicitor as executor, and neither were aware of 30/60-day CGT. I know that Helen and other PBs attempted to engage with HMRC about this new regime in the design phase but HMRC were not for listening. I have no sympathy with HMRC as they chose to ignore the good advice they were being given. Exactly the same is happening with MTD ITSA.
"The whole scenario serves only to reinforce my previous grumbles about the difficulties of trying to make an annual tax into a transaction tax."
HMRC are attempting to do the same with MTD ITSA. VAT is a transactional tax. ITSA is an annual tax. That's why VAT lends itself to MTD whereas ITSA does not. 30/60-day CGT affects a small proportion of SA taxpayers whereas MTD ITSA will affect most of them. The magnitude of the chaos that will be generated by MTD ITSA will make 30/60-day CGT look like a walk in the park.