Finance (No 2) Act 2017 Taxation of Non-UK Domiciliaries - UPDATE

18 Oct 2018

The 2016-17 self-assessment season was challenging for many agents due to the significant increase in the number of returns which were subject to an exclusion. An exclusion applies when HMRC‚ s tax calculator will not compute the correct tax liability. For some exclusions it is not possible to file online as HMRC‚ s system will not accept the return, for others it was possible to file online but the system would not calculate the tax liability correctly from the information on the return. In the latter cases individuals, particularly the unrepresented, may not have appreciated that their tax had been incorrectly calculated.

HMRC are looking to start the process of reworking computations on 19 November. Where the tax position has changed the individual will receive a new SA302 calculation. If any additional tax is due the individual will have 28 days to pay before interest and late payment penalties apply.

Once an individual‚ s return has been reworked in this way, it is important to note that any further amendments to the return must be submitted on paper, and are not filed electronically.

Agents also need to be aware that HMRC has taken the decision not to send copies of the amended SA302 to the individual‚ s agent. The individual will be advised to contact their agent if they have one. The ATT, CIOT and other professional bodies have expressed their disappointment in this decision.

HMRC are expecting that it will only be necessary to actually amend about half of the 30,000 returns that they have identified for review. On this basis, the amendments should take around a week to process.

Technical Team