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Self-assessment: Are you excluded from online filing?

Someone filing a tax return sheet - imageEvery year, HMRC publishes a list of exclusions for online filing. This list outlines the circumstances under which you will need to submit your self-assessment tax return by paper rather than online, as your online self-assessment could be rejected, or your tax liabilities could be calculated wrong. The problem is that the deadline for paper submissions is much earlier than it is for online submissions – 31st of October rather than 31st of January. Exclusions exist for those who cannot submit their self-assessment online; instead, the deadline for their paper submissions is extended.

Why do filing exclusions exist?

Frustratingly, HMRC’s algorithms cannot always correctly calculate the amount of tax due, and the software they use for tax returns will struggle with certain combinations of income sources and amounts. Therefore, HMRC needs these tax returns to be filed as paper returns, so they can manually check that the calculations are correct. This is the case even when you use third-party software to calculate your online self-assessment.

Note that most of the exclusions published for the 2016/17 tax year are no longer in place, and instead 12 new ones have been added – numbers 79-90. Unfortunately, this means that whether you were on the previous list of exclusions or not, you need to check it again. During 2016/17, additional problems were caused when HMRC changed the self-assessment software halfway through the year. It now seems like they will keep the current software, so no panic – you should be able to submit your self-assessment in good time.

How do I check if I’m affected?

If you submit your own self-assessment tax return and think you may be affected, you have to trawl through the 20-page document yourself. Unfortunately, there’s no way around it. On the other hand, if you have a tax accountant like Tax Agility submit your self-assessment, they will check if you are excluded, and they will always calculate your tax in a way that is beneficial for you; that way you won’t be liable to pay any fines, and you can maximise the income at your disposal.

What happens if I can’t submit my paper self-assessment return on time?

If you are excluded from online self-assessment, you need to submit a paper self-assessment by the 31st of January or be liable to pay a penalty fine. You also need to include a clear note with your documents referring to the list of exclusions. Your exclusion ID will be in the far-left column on the list. Customers who notify HMRC that they are affected by an exclusion will not be charged a fine, as long as everything is submitted before the deadline for online self-assessment.

Who can help me?

If issues like exclusions and tax self-assessment seem bewildering, it’s because they are. The list provided by HMRC is not an easy read unless you know what you are looking at. It’s important to get your personal tax return right; otherwise, you may pay a hefty fine or much more tax than you are supposed to.

Experienced London tax accountants at Tax Agility know exactly what to submit and when to submit it, which is why our customers trust us to handle their self-assessments. Even if you are experienced in dealing with your personal tax return, why not check if we could save you money?

For a free consultation, call Tax Agility on 020 8108 0090 or complete our simple online enquiry form.