Income tax bill

[Lily the Pink]

Having just completed my SA return for 2019-20 I have a small amount of tax due to be paid by 31st Jan. The calculation does not show the impact on the tax bill of either the transfer of spouse's allowance to me or my share of losses in a partnership. Spouse's and partnership returns have both been submitted within the last few days. Do I just wait and check my tax account next week in the expectation that the bill will have reduced accordingly, or do I need to contact/chase HMRC ?

[Eric Mc]

Sounds like you’ve done something wrong. If you had trading losses in tax year 2019/20 and you intended to offset those losses against other income in 2019/20, then your self assessment bill for 2019/20 should be taking those losses into account.

[Lily the Pink]

The data is entered on the SA form, but it does not appear in the resultant calculation. Maybe it has to wait until the partnership's return has got into the system (it was only filed last week) ?

[Sheepshanks]

They normally take what you submit at face value in the first instance then check later.

[SS2.]

Sheepshanks said:

They normally take what you submit at face value in the first instance then check later.

This.

The system isn't smart enough to cross reference other databases as your data are entered.

[Eric Mc]

Lily the Pink said:

The data is entered on the SA form, but it does not appear in the resultant calculation. Maybe it has to wait until the partnership's return has got into the system (it was only filed last week) ?

When you have trading losses available to you, there are a umber of options available

i) you can carry the loss back for offset against trading profits from the same business in the preceding year

ii) you can carry the loss forward against trading profits from the same business in future years

iii) you can offset the loss against other income in the same tax year

Check where you have placed the loss in your return to see which option you have selected. It looks to me that you might have put the claim for the loss in the wrong box and it is therefore not offsetting the loss against "Other Income in the same Tax Year".

[Lily the Pink]

Thanks. I had the Cash Basis box ticked which seemed to be the problem regarding the partnership losses.

[Eric Mc]

Are you getting credit for the losses now?

[Sir Bagalot]

Eric Mc said:

Sounds like you’ve done something wrong. If you had trading losses in tax year 2019/20 and you intended to offset those losses against other income in 2019/20, then your self assessment bill for 2019/20 should be taking those losses into account.

I have found previously that the HMRC's wonderfully mega expensive IT systems takes time to catch up. Go back in a week and the correct calc will be shown

[Lily the Pink]

Eric Mc said:

Are you getting credit for the losses now?

Yes, I am now thanks.

Sir Bagalot said:

I have found previously that the HMRC's wonderfully mega expensive IT systems takes time to catch up. Go back in a week and the correct calc will be shown

No sign of receiving the unused spouse allowance, but there is no way of claiming that on my return so I suspect that will appear as you suggest.

[anonymous-user]

Sir Bagalot said:

I have found previously that the HMRC's wonderfully mega expensive IT systems takes time to catch up. Go back in a week and the correct calc will be shown

AFAIK the calc is fixed from the moment it's first shown to you and pressing the "submit return" button doesn't change a thing.

However, the website specifically says c.72 hours before the submitted return will show up as firm. My assumption is that only when you press "submit return" does HMRC initiate whatever processes it has for checking the return, either automatically or by hand. Once it becomes firm you'll never hear from them again unless you get selected by their version of a Premium Bond win where your number gets picked at random for follow-up enquiries or some other, later information in their Big Computer in the sky highlights a conflict with what you've submitted. They generally have 12 months to do this although they can go back further if they smell a rat (and without time limit for fraud).

Their Big Computer in the sky is very good at playing join the dots. Your employer will be filing SAYE, your bank will reporting any interest received, your ISA and pension providers will be linking to your National Insurance number, the Stamp Duty/CGT systems will tell them how many properties you own etc etc.