HMRC can’t get their own tax calculations right

HMRC can’t get their own tax calculations right

Dividend allowance causes problem for HMRC’s own systems

So how can we rely on them to roll out MTD (making tax digital) correctly next year?

HMRC can’t even get their own calculations right

HMRC’s own software – available to taxpayers online has a specification error.  The department is apparently working on a fix and has added two situations to its “list”! of self-assessment individual exclusions for online filing for 2016/17.

The taxpayers affected are:

  1. those who have non-savings income less than the personal allowance and savings starting rate (SSR) plus savings income not covered by the personal savings allowance they are entitled to.  The SSR is not being given, in error.
  2. those who have non-savings / savings/dividend income and their income exceeds the basic rate band, the calculation is incorrectly reducing the higher rate band by the whole £5,000 dividend allowance (and not just for the amount of the allowance not used in the BRB).

Whilst these are technical explanations of the errors, they illustrate clearly that HMRC cannot always be trusted to calculate your tax correctly. A leading tax specialist was quoted in Taxation Magazine as saying the error was “astonishing”.

“We are just 12 months away from the tax system being digitised, yet HMRC cannot even correctly digitise one aspect and is instead asking for paper returns.”

This hardly bodes well for the MTD project.

 

If you need help with your tax returns or checking your tax bill:

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