The flaw meant that Marriage Allowance claims were being omitted from Self-Assessment claims, so there may be a number of individuals who have overpaid tax. The Low Income Tax Reform Group (LITRG) has advised married couples who filed their tax returns prior to the glitch being fixed on 21 January 2020 to check their calculations.
Victoria Todd, Head of the LITRG team, said:
“There was a glitch in HMRC’s system until this month that meant the recipients of the tax reduction did not see this in their Self Assessment tax calculation for 2018/19 when they used HMRC’s online system to file their tax return. HMRC have been working behind the scenes to issue amended calculations to those affected and we urge taxpayers to check their calculations and make sure the tax reduction has been included. Some taxpayers may already have made their tax payments, due by 31 January 2020, and have overpaid due to HMRC’s error. Such taxpayers will receive a tax repayment within four weeks and should contact HMRC if they do not.” The Marriage Allowance allows individuals to forfeit up to 10% of their personal allowance to transfer to their spouse or civil partner in the event that they do not make full use of their personal allowance. This allows the spouse or civil partner to obtain a tax reduction in the event that both parties are basic rate taxpayers (or Scottish intermediate rate, if applicable).
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EYU can still be utilised for tax year 2019-20 – a reminder 30 January 2020
As previously reported in News Online back in August 2019, despite original intentions to abolish the Earlier Year Update (EYU) for tax year 2019-20 onwards, HMRC confirmed that an EYU would continue to be classed as a valid submission for amendments to the tax year 2019-20. As the current tax year rapidly draws to a close, the integral message to payroll professionals is that, if they wish to send an EYU for amendments to the current tax year ending 5 April after 19 April 2020 then they can do so, and this will still be accepted. Alternatively, they can send a Full Payment Submission (FPS), and this is equally acceptable. The new process of submitting an FPS for tax year amendments is entirely voluntary and the tax year 2019-20 is an extension to the pilot year (which ran in tax year 2018-19), which tested the utilisation of an FPS as opposed to an EYU for amendments to a tax year after the 19 April deadline had passed.
The measure for extending the use of an FPS to report revised year to date figures has been long anticipated since the launch of Real Time Information (RTI) and so the change to process has been widely welcomed.
HMRC’s Software Developers Support Team (SDST) commented:
“The initial analysis from the RTI FPS ‘Year to Date’ pilot has been very encouraging. We want to continue to evaluate these early positive results prior to making a final decision about the withdrawal of the EYU.”
The rationale behind the extension to the pilot year is to ensure that everything runs seamlessly and to allow payroll professionals to adjust to the change in process. Until there is further notification, it is assumed that the EYU will be abolished from tax year 2020-21 onwards but if there are any further updates, the CIPP will advise members accordingly. An EYU will still be required for years 2013- 14 through to 2017-18 but as each of these years becomes out of date, the need for an EYU will reduce.
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Record breaking 10.4 million customers filed Self-Assessment tax returns online 5 February 2020
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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