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HMRC SA100 Self Assessment tax calculation errors for tax year 2016-17

Andica software calculates tax and allocates various allowances in line with HMRC tax calculation specifications and computational rules. These calculations are performed and allowance are allocated based on the information processed by a customer within the returns, supplementary forms selected, values entered, boxes ticked, etc.

All software must calculate tax and/or allocate allowances complying with the standards set by HMRC, regardless of whether HMRC specification has a calculation method specified correctly or incorrectly.

In most cases, HMRC publish some of these calculation and data validation issues in the Specials and Exclusions cases for the relevant tax returns type.

Issues were identified in HMRC specifications for 2016-17 returns for Individuals in areas such as savings and dividend income, Class 2 NIC, allocation of personal savings allowance and marriage allowance. These have been added into the Exclusion cases list and HMRC recommended that customers file a paper return. Due to late identification and confirmation, there was not enough time for software developers to include exclusions within the software.

Subsequently, in a briefing, HMRC announced a decision to make changes to the 2016-17 calculator in-year across their systems and interfaces. These changes address errors in the current calculator and will enable affected customers to be able to file online and receive the correct calculation. Brief information is published on HMRC Tax agent blog.

At the same time, HMRC also plan to automate the recovery of all cases where a return has already been filed but shows the incorrect tax position for the customer. This will include all customers whether they have filed online or on paper. This recovery will include an SA302 and bespoke output to the customer to advise them of the correction.

Andica have released a software update on 30 October 2017 to handle HMRC tax calculation fix dated 23 October 2017.

Despite the updates, there were some other issues discovered in the HMRC tax calculation guidelines. HMRC have included these new issues in the Exclusion cases list.

What happens now:

Not all tax payers are affected by these issues. As stated above, HMRC will automate the review process for the affected returns and advice tax payer of any corrections.

Andica customers who have purchased software prior to 30 October 2017 and are aware that their tax return is affected by the above issues can email us requesting an update to the software. These customers can then submit an amended return.