A problem with HMRC’s software will mean that some tax payers will have to submit paper tax returns
Personal tax changes mean that, currently, HMRC online systems cannot correctly deal with certain levels of income and the result is some tax returns will have to be submitted manually otherwise people could face a higher tax bill.
The new rules that have come into force regarding the way in which interest and dividend income is taxed for the 2016/17 tax year, has brought with it a problem in how overall income tax liability is calculated online for certain individuals.
If you fall into one of the following two categories, the 2016/17 tax return will have to be submitted on paper to ensure all reliefs are given. The additional tax liability if this is not done could, in many cases, be around £1,000.
You will be affected by this anomaly if:
- You have income of over £32,000 made up from savings (eg, bank interest) and non-savings sources (eg, employment, pension) of which the non-savings income is between £11,000 and £16,000; or
- You have non-dividend income of between £27,000 and £32,000 which, together with dividends, takes your total income to more than £145,000.
If you currently prepare your own tax return and you think that you may be affected by this or have any questions, please contact email@example.com.