Simplification of tax return amendment process planned

The government is planning to review the complicated process for amending tax returns to make it more transparent and easier for taxpayers to use, with a possible move to a single digital tax amendment service

The consultation, Amendments to tax returns, aims to improve the current process while recognising the move towards complete digitisation of the tax process.

There is no consistency in the current approach to amending returns with different rules for income tax, corporation tax and VAT, for example. The different methods vary according to tax, value, accounting period and turnover, with different time scales and methods of reporting amendments.

For income tax self assessment, for example, HMRC can conduct a compliance check and then amend a taxpayer’s return if it spots an error up to nine months after the return was submitted. In some circumstances income tax overpaid may be refunded up to four years after the end of the year of assessment.

Corporation tax amendments must be made within 12 months of the filing deadline depending on the company’s year end date, and there is no fixed method for notifying HMRC of changes.

There is no scope for amendment to a specific VAT return; mistakes have to be adjusted on the next quarterly VAT return, based on a number of criteria, including the financial value of the error.

The consultation focuses on income tax, corporation tax and VAT, although the government is keen to gather feedback on other taxes where problems arise.

One of the main problems with the current disparate system is that it causes confusion as there are so many different ways of making amendments. Taxpayers want to have the same process regardless of when it is invoked, and are looking for a consistent process across all taxes.

There is also demand for an online process instead of verbal and paper-based amendments, with functionality for taxpayers to be able to explain why they made an amendment up front (including being able to attach supporting documents).

Unsurprisingly, taxpayers also want a receipt and acknowledgement of an amendment.

Tax agents also cited problems with HMRC when they take over a new client mid-way through an amendment.

In the consultation, HMRC stated: ‘We want to create a consistent digital approach, whilst still accommodating the digitally assisted and excluded, to make it simple for taxpayers to see their returns and make amendments where necessary.’

The consultation asks for feedback from stakeholders on the type of tax returns submitted, the current amendment process used and people’s opinions about the process, from the level of complexity to the amount of time it takes to deal with an amendment, response times and service levels from HMRC, and any difficulties experienced with the current system.

It is also gauging views on whether there is support for a consistent amendments process across all taxes, and whether this would save money for businesses, as well as the introduction of a ‘future single digital amendment process for all taxes’.

The consultation closes for comment on 6 February 2019.

Email submissions to

HMRC Consultation, Amendments to tax returns, issued 7 November 2018

Report by Sara White

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