HMRC exclusion #51

[stewamax]

My wife's SATR was caught by this exclusion (where non savings income is below the Personal Allowance + Starting Rate Band but savings income is in excess of the Starting Rate Band) and she submitted on paper instead of digitally to get the correct relief.

HMRC has just let her know of her tax payable, and this has clearly been calculated the 'wrong' way (i.e. without the correct treatment of the exclusion), and there is no note from them to say that the tax payable will be recalculated when they get their system sorted. Originally they weren't going to fix things until the 2017-8 SATR was due, but later, when they apparently realised the potential scale of the of the problem, announced that there would be a mid-year fix due in October). The TaxCalc people tell me that they will be shipping an update in October week 1 that will handle the exclusion (among others) correctly in line with HMRC's own package validator system, and I assume others will do likewise.

But I find it a mite staggering that HMRC have issued a tax demand known to be wrong (I included a covering note about being caught by exclusion #51) with no explanation as to how a subsequent correction would be handled.

Anyone else in the same boat?

[stewamax]

I noted in my opening post in this thread that the TaxCalc people would be issuing a revised calculation in October week 1.
They have now done so and I have sent a revised calculation (via a message) to HMRC. There is of course no change to the SATR itself, so there is no question of resubmitting it.

But HMRC have not revised their online submission system, so anyone caught by exclusion #'51 who was delaying submitting electronically via TaxCalc or similar until HMRC had fixed everything still (currently) has to submit on paper!
I cease to be surprised.

[stewamax]

.... and the latest information on this is that HMRC have now committed to have their 'online service' fixed by Monday 23rd October. I put 'online service' in quotes because there are (presumably) two different things to fix: HMRC's own web-based service and HMRC's back-end to 3rd party tax software. Realistically they will have to do both or a week later they will be sitting on a monumental pile of:
- paper SATRs, and
- SATRs submitted online that, if already processed and the results returned as statements of tax due, will need redoing and reissuing - with tax credits to taxpayers accounts where payment has already been made
Potentially the corrected calculation will also reduce the tax demand for the January and July payments on account for 2017-18.

And even if HMRC come up with the goods, the changes to the various exclusions calculations and comments from tax specialists has resulted in fourteen more exclusions, four of which were created by fixing the current exclusions! Anyone who in 2016-17 had a matured or surrendered life assurance policy and is, perhaps as a result, a higher-rate taxpayer and thus potentially eligible for top-slicing relief may be caught by two of these new exclusions.

[PinkDalek]

.... and the latest information on this is that HMRC have now committed to have their 'online service' fixed by Monday 23rd October. ... And even if HMRC come up with the goods, the changes to the various exclusions calculations and comments from tax specialists has resulted in fourteen more exclusions, four of which were created by fixing the current exclusions! Anyone who in 2016-17 had a matured or surrendered life assurance policy and is, perhaps as a result, a higher-rate taxpayer and thus potentially eligible for top-slicing relief may be caught by two of these new exclusions.

More here on this:

https://www.accountingweb.co.uk/tax/hmr ... ead%20more

[stewamax]

Tick tock. Tick tock....
With just two weeks now to go before the January payment deadline, HMRC has finally issued my wife with a revised statement online (with no concurrent email saying 'check your messages') and no paper notification, despite the SATR being filed on paper because online filing gave the wrong result.
The new statement is, however, spot on.