Warning - HMRC have mucked up 2016-17 self-assessment

2

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  • chrismac1
    chrismac1 Posts: 2,585 Forumite
    I hope HMRC are going to fine themselves for these careless and negligent errors. That would probably be a penalty of 80%, but as we're mates I'll call it a round £2bn.
    Hideous Muddles from Right Charlies
  • Cook_County
    Cook_County Posts: 3,085 Forumite
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    Pennywise wrote: »
    As confirmed by the accountingweb article above, HMRC & other tax software CAN'T cope with it and HMRC instructions are to submit a paper return instead.

    Trouble is, how do people know that what they submit electronically isn't right. I think taxpayers can reasonably be expected to assume that official tax submission software is correct. How would they know to check HMRC's list of circumstances when paper returns are needed? It doesn't look as if HMRC's system will flag up that your submission is wrong, so you'll blindly pay too much tax.

    Another point is what if you don't submit electronically until say December, then discover you have to file manually because the electronic system doesn't work properly, but you've missed the paper return filing deadline?

    You really couldn't make it up!
    This article quotes no-one from HMRC. It is very, very one-sided. We have no idea if HMRC software will be programmed to address this issue; all we have to date is 1 lot of salesmen trying to persuade the tax and accounting universe that their software is a compulsory purchase this year. Chrismac1 has helped make those guys a bit more cash; but we really still do not know what HMRC think of the issue.
  • polymaff
    polymaff Posts: 3,903 Forumite
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    Cook_County wrote: »
    This article quotes no-one from HMRC.

    err, except that it does. Reading:

    "HMRC has added the scenarios for taxpayers in groups A and B to their exclusions list which was issued on 17 March"

    might suggest that one should Google:

    self assessment exclusions 2016/17

    and you'll find that exclusions 51 and 52 are HMRC's own admission that these faults are still there (as of 17th March, the document's date) - and that the workaround is a paper submission
  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    Cook_County wrote: »
    This article quotes no-one from HMRC. It is very, very one-sided. We have no idea if HMRC software will be programmed to address this issue; all we have to date is 1 lot of salesmen trying to persuade the tax and accounting universe that their software is a compulsory purchase this year. Chrismac1 has helped make those guys a bit more cash; but we really still do not know what HMRC think of the issue.

    Have a look at HMRC webpage:-

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/601946/2017-exc-indi.pdf

    Items 51 and 52 on page 9 explain the failings in the online filing system which also follows through to commercial software as commercial software suppliers must use the equations/methodology as specififed by HMRC. Their web page clearly shows a paper return is required. More worryingly, it shows that the issue will be "fixed" for 17/18 tax returns, so it appears no plans to correct it for 16/17 returns.

    These changes were announced over a year ago. HMRC have failed in that they didn't understand what the changes meant and pressed ahead with their systems programming on the wrong basis. It was late in 2016 when Tim Good noticed the errors and told HMRC, but by then it was too late for HMRC to make the corrections.

    Only one organisation at fault here - HMRC 100%. You seem to want to shoot the messenger - the people who discovered the error and put themselves out to help correct it.
  • chrismac1
    chrismac1 Posts: 2,585 Forumite
    That highlights how our tax system is on a par with Bangladesh. When you are informed "late in 2016" that your programming has glitches, you still have THREE MONTHS left to sort them. To any commercial business that is light years' of time, to HMRC it is not enough time.

    RUBBISH beyond belief. Making Tax Diabolical is going to be a right mess, because let me tell you by the standards of the 2017 tax returns HMRC already have nowhere near enough time left to fix all the myriad problems there are in the very very sketchy specification they have seen fit to issue for this massive tax system change.

    If you make a big mess of easy peasy Primary 1 stuff, don't even bother putting your name down for A levels less than a year later. But that is exactly how HMRC is behaving right now.
    Hideous Muddles from Right Charlies
  • chrismac1
    chrismac1 Posts: 2,585 Forumite
    In all fairness my comments with regard to Bangladesh are very probably a gross insult to the Bangladesh tax authorities and I apologise to any Bangladeshi passport holders who have been offended by them.
    Hideous Muddles from Right Charlies
  • chrismac1
    chrismac1 Posts: 2,585 Forumite
    Update - per Rob Ellis, CEO of BTC Software, HMRC have finally woken up to the fact that the current paper tax submission plan will result in a mountain of paper in January 2018, when on average 40% to 45% of self-assessment tax returns are filed.

    So for the first ever time HMRC are considering fixing the glitches in their software for the 62 or so of identified mess-ups currently hard-wired into all UK tax calculations for 2016-17.

    This means that for the next 2 months or so, if you are affected the best course of action in my view is to do nothing. If HMRC move quickly then you can file as normal. After 2 months, assume HMRC are going at their normal snail pace and file on paper.
    Hideous Muddles from Right Charlies
  • TheCyclingProgrammer
    TheCyclingProgrammer Posts: 3,702 Forumite
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    I wonder if these issues are having a knock-on effect on third-party integrations - still no sign of 2016/17 updates to FreeAgent to enable tax return submission. FreeAgent could just be being slow I guess - anyone else noticed delays with any other providers (Kashflow, Xero, Quickbooks etc.) that support tax returns?
  • polymaff
    polymaff Posts: 3,903 Forumite
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    edited 10 July 2017 at 5:46PM
    chrismac1 wrote: »
    So for the first ever time HMRC are considering fixing the glitches in their software for the 62 or so of identified mess-ups currently hard-wired into all UK tax calculations for 2016-17.


    Don't hold your breath :)

    20+ efforts to get this right, and HMRC thinks that the next issue - developed under pressure - will solve all of these issues?
  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    TheCyclingProgrammer wrote: »
    I wonder if these issues are having a knock-on effect on third-party integrations - still no sign of 2016/17 updates to FreeAgent to enable tax return submission. FreeAgent could just be being slow I guess - anyone else noticed delays with any other providers (Kashflow, Xero, Quickbooks etc.) that support tax returns?

    Freeagent were slow last year too.
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