HMRC has updated the list of exclusions from online filing – there are some significant additions for 2016/17 including some low non-savings income, high savings income cases. This issue is of major concern to the NI Tax Committee and was discussed recently at our quarterly meeting with HMRC senior management.

Members are advised to consider the impact on their client portfolio as soon as possible and to discuss this issue with their software provider if they have not already been contacted by them.

The new exclusions mean that HMRC has been unable to update its own software (the SA online calculator) for some changes in tax legislation which took effect last April. This is very frustrating for agents. HMRC advises that this will not be rectified in 2016/17 and is not able to confirm the exact number of taxpayers affected. HMRC expects to rectify the issue so that these particular exclusions can be removed for 2017/18 and subsequent years.

Where a personal return cannot be filed online for one of the reasons listed, provided that a paper return is delivered on or before 31 January following the end of the tax year to which the return relates, HMRC will accept that the taxpayer had a reasonable excuse for failing to file a paper return by the normal 31 October deadline. A reasonable excuse claim should accompany the paper return.

Any paper return submitted must conform to the normal rules for paper returns even if it is a computer generated paper return e.g. it must hold a valid signature.

Some software packages may prevent online filing by those affected and others may include a warning message. However many may still allow the return to be filed meaning the calculation may be incorrect or will be amended by HMRC.