2018-19 Self Assessment - Tax returns impacted by Exclusions

On 20 January, HMRC shared the following information with us about exclusion cases, confirming the approach to submitting returns and making tax payments for 2018/19. As members will be well aware, the deadline for both is 31 January 2020.

It is quite late in the day to be sharing this information, as HMRC acknowledge, but this is the same procedure as last year. The information has already been shared with software developers.

“Below is some information to help you support your customers should they be impacted by an Exclusion and contact you for advice. There are no changes to the advice we provided for 2017-18, however we are sorry that we are late in sharing this with you.

All Self Assessment customers need to file their 2018-19 return, make a balancing payment for 2018-19 and their first payment on account for 2019-20 by 31 January 2020 (if appropriate).                                

We are aware, however, that if a customer is affected by an exclusion they won’t be able to file online or get an accurate self-assessment income tax liability calculation for 2018-19.

In this instance customers should:

• file their Self Assessment by paper return, along with a completed reasonable excuse claim by 31 January 2020.
• make a reasonable effort to estimate their income tax liability for 2018-19 based on the information they have.
• make an appropriate balancing payment for 2018-19 and their first payment on account for 2019-20 by 31 January 2020.

Providing the return and payments are received by the deadline of 31 January 2020 HMRC will not charge a late filing penalty, late payment penalty and /or interest on the estimated amounts. Where we have been unable to stop the automatic issue of these we will accept being affected by an Exclusion as a reasonable excuse and the penalties will be withdrawn.  

We will contact those customers who have needed to estimate their balancing payment to confirm their actual income tax liability. If this results in an additional amount being payable customers should pay any new amount due within 28 days of the notification to stop interest being added. As yet, we do not have a date for when this contact will be made.

Where a customer is uncertain if their circumstances match an exclusion and their software allows successful online submission, they should:

• file their Self Assessment return online by 31 January 2020  
• pay their estimated balance for 2018-19 Self Assessment and their first payment for 2019-20 by 31st January 2020

HMRC will subsequently:

• identify any cases filed online where the calculation is incorrect
• make any required correction to the income tax liability calculation for 2018-19 and 2019-20 payment on account
• inform the customer of the correct income tax liability calculation for 2018-19 and any revision to 2019-20 payment on account
• advise when the revised amounts need to be paid
• inform customers that they will not have to pay late payment penalties and/or interest attributable to any additional amount arising from the correction if it is paid before the revised due date.

For further information please ask your customers to speak to their tax adviser, or use our SA110 notes and SA150 How to fill in your tax return. Customers can also contact HMRC if they receive any penalties or accrue interest in this case.”