Self assessment season in review: outages, pre-population and exclusions

3 February 2020: with tax season over for another year, the ICAEW’s Tax Faculty has put together a review of some of the self assessment trouble spots that members have reported this year.

Given the ever-increasing volume of people required to file self assessment tax returns, it’s perhaps unsurprising that a number of snags, outages and delays affect those trying to lodge their information, or do so on behalf of clients.

But what has been troubling ICAEW members this busy season? The Tax Faculty has put together a list of the issues reported on its helplines.

1. Pre-population APIs

HMRC’s self assessment pre-population APIs are designed to automatically pull employer data from HMRC’s system and populate tax returns for taxpayers or agents, with the ultimate aim of speeding up filing and improving accuracy.

However, the Tax Faculty has had quite a few comments from members who think the APIs are not robust enough to cope with the demands of busy season. There have been periods where APIs haven’t been returning data where they should be, and periods where they have not worked at all. HMRC is trialling updated APIs with some software which may in due course resolve these issues.

2. Online exclusion returns not processed correctly

The Tax Faculty has received reports from members that in the case of exclusions from online filing, paper returns with a reasonable excuse attached are being processed as regular returns and penalties are being charged when they shouldn’t be.

In theory, when HMRC receives a paper return marked as an exclusion case it will divert it to a special team that knows how to handle these cases. However, this has not happened consistently. To help avoid this error it is recommended that the front page of the return itself should be very clearly marked as an exclusion case, ideally identifying which exclusion applies.

3. System outages

Being unable to access the system to file a return has not been a problem for several years, but this time around the system has been down a couple of times over the final weeks of self assessment season.

Add to that the issues with filing Making Tax Digital for VAT returns, and some agents have experienced significant downtime so far this year.

4. Delays in processing returns

While such a delay is inevitable for those filing paper returns, this year more than previous years there has been a significant lag between filing and the information appearing on clients’ accounts for those filing online.

5. Lack of statements

Another problem reported by Tax Faculty members is HMRC not issuing statements even when returns have been filed in good time. There is always a cut-off date – usually late December or early Jan – but before that HMRC should be issuing statements in time, which has not happened in a number of cases in this cycle.

Clients not receiving statements has frustrated agents, as they then have to spend time clarifying for the client what they have to pay.

6. No demand for small amounts

There has been a fair amount of confusion around this small but important area. It is not well-known, but HMRC does not send demands for amounts less than £99.99. This has proved of particular interest to some agents with elderly some of whom want to pay everything to the penny.

7. Class 2 liabilities not showing up on statements

While this has not been as big a concern as in previous years, a number of comments from Tax Faculty members show that it is not going away completely.

8. And on a positive note...

One major problem from last year’s self assessment season was payments on account not being charged. This year the Tax Faculty is pleased to report it has heard nothing on this particular trouble spot.