HM Revenue & Customs has confirmed that it is currently looking at options to fix errors which have arisen for certain taxpayers when submitting self-assessment forms online. Individuals with specific tax codes have had to resort to filing their returns on paper instead.
A HMRC spokesperson said: “HMRC is working hard to ensure that no tax is incorrectly assessed. A very small number of self-assessment taxpayers who have a very unusual combination of income types will have to use paper tax returns.”
Back in April, software glitches began to cause problems, with HMRC online calculators not being updated to reflect the changes made in tax allowances.
Directors Tim Good and Giles Mooney of Absolute Software began working with HMRC and talking to The Treasury to discuss the complexity of the new algorithms following HMRC’s decision to use Good’s spreadsheet calculator algorithms as the basis for its calculation software this year..
Good explained: “I had a meeting with HMRC last November to clarify the computational issues and it looked as though they were going to be able to get it sorted in time for the new reporting season. But apparently, the team responsible for coding the main HMRC self-assessment system was simply unable to complete the task from the Excel algorithms in time.”
Taxpayers who have certain income sources and amounts are finding that HMRC’s servers are unable to calculate the correct amount of tax due. Discrepancies in the calculations are causing the servers to reject any self-assessments submitted, even with the correct tax calculation generated by third party software.
The taxpayers who now must fill out a paper return, run the risk of missing the filing deadline, as many leave it until close to the 31st January online deadline before completing their returns. The paper filing deadline is 31st October.
These circumstances are identified by HMRC as ‘exclusions’ each year. HMRC has collaborated with software developers and subsequently identified and added 16 exclusions for 2016/17.
Customers who notify HMRC that they are affected by an exclusion when submitting a paper return will not be charged a late submissions penalty. The paper return must be received by the deadline for online submissions.
“Any customer who submits online will have their calculation updated by HMRC to make sure they pay the right tax.” HMRC has stated.