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HMRC internal manual

Self Assessment Manual

Returns: individuals returns: calculation will be wrong

The automatic calculation will be incorrect in the following exceptional cases

For 2012-13 onwards

  • If the taxpayer claims relief under the Swiss Tax Agreement and elects for the Swiss tax to cover their UK liability, they will make a claim in the Additional Information box on their return and the automatic tax calculation will not produce the correct results. For further information, see subject ‘Swiss Tax Agreement’, (SAM121615).

For years 2001-2002 onwards

  • The standard calculations do not give allowances and reliefs in the most beneficial way and Double Taxation relief is due
  • Relief is due under Section 699 ICTA 1988
  • The taxpayer claims post-employment deductions under Section 92 FA 1995
  • The taxpayer is claiming full foreign service exemption and tax has been deducted from lump sums
  • The taxpayer has transferred surplus allowances to the spouse, the surplus is then reduced and the excess will not be recovered from the spouse

For 2000-2001

  • The standard calculations do not give allowances and reliefs in the most beneficial way and Double Taxation relief is due
  • Relief is due under Section 699 ICTA 1988
  • The taxpayer claims post-employment deductions under Section 92 FA 1995
  • The taxpayer is claiming full foreign service exemption and tax has been deducted from lump sums
  • The taxpayer is over 65, training has taken place overseas, and vocational training relief is claimed (box 15.1) (see ‘Capture Operators Guidance’ for a work round in these cases)
  • The taxpayer has transferred surplus allowances to the spouse, the surplus is then reduced and the excess will not be recovered from the spouse

For 1999-2000

  • The standard calculations do not give allowances and reliefs in the most beneficial way and Double Taxation relief is due
  • Relief is due under Section 699 ICTA 1988
  • Relief is due in terms of tax under Section 233(2) ICTA 1988 in respect of excess liability on non-qualifying distributions
  • The taxpayer claims post-employment deductions under Section 92 FA 1995
  • A section 135(5)a deduction is due whereby tax charged on the grant of the option is to be deducted from any tax chargeable on the exercise, assignment or release of the option
  • Widows and orphans contributions, in excess of the normal limit, are paid out of a retirement lump sum and by concession £100 additional relief is given at the basic rate
  • The taxpayer is claiming full foreign service exemption and tax has been deducted from lump sums
  • Training has taken place overseas and vocational training relief is claimed (box 15.1)
  • The taxpayer has transferred surplus allowances to the spouse, the surplus is then reduced and the excess will not be recovered from the spouse

For years 1996-97, 1997-98 and 1998-99

  • The standard calculations do not give allowances and reliefs in the most beneficial way and Double Taxation Relief is due
  • Relief is due under Section 699 ICTA 1988
  • Relief is due in terms of tax under Section 233(2) ICTA 1988 in respect of excess liability on non-qualifying distributions
  • Corresponding deficiency relief reduces income for all purposes, (not just Higher rate purposes)
  • The taxpayer claims post-employment deductions under Section 92 FA 1995
  • A Section 135(5)(a) deduction is due whereby tax charged on the grant of the option is to be deducted from any tax chargeable on the exercise, assignment or release of the option
  • The taxpayer is not liable to tax (NNL) and is claiming

    • Employee contributions to a personal pension plan (box 14.15)

    Or

    • An amount of gross free-standing additional voluntary contributions (FSAVC) paid (box 14.17)

    And / Or

    • An amount of payment made for vocational training (box 15.1)
  • Widows and orphans contributions, in excess of the normal limit, are paid out of a retirement lump sum and by concession £100 additional relief is given at the basic rate
  • The taxpayer has transferred surplus allowances to the spouse, the surplus is then reduced and the excess will not be recovered from the spouse
  • The Non-Residents calculation incorrectly appears to be more beneficial because it does not take into account liability on charges
  • There is an entry in box 3L.39 and some or all of the 3L.39 income should be charged at the lower rate as the lower rate band has not been fully utilised by other income

In addition to the above for 1996/97 and 1997/98 only

  • The amount in box TSR3 on the Top Slicing relief working sheet is negative. To calculate the entry in box TSR3

    • Calculate the amount to be entered in box TSR1 (L22 plus L23 plus L25)

    If at this stage the result is 0 (zero) or negative, enter 0 (zero) in box TSR1

    If at this stage the result is positive, deduct L23, deduct 12.9, and deduct (1.29 plus 1M.45 plus 5.22). Enter the result in box TSR1

    • Calculate the amount to be entered in box TSR2 (6.8 plus 12.5 plus 12.8). Enter the result in box TSR2
    • Calculate the amount to be entered in box TSR3 (box TSR1 minus box TSR2). Enter the result in box TSR3

    For more information see subject ‘Top Slicing Relief’ (SAM121630)

  • An entry is made of untaxed income liable at 20% on the Individual return Partnership (full version) pages, (box 4.32 1996/97, box 4.35 1997/98)

And 

* The taxpayer has life assurance gains and / or lump sum compensation cases chargeable under S148 ICTA 1988

Or  


* The taxpayer has capital gains and life assurance gains and / or lump sum compensation cases chargeable under S148 ICTA 1988
  • An entry is made of payments to a trade union or friendly society for death benefits (box 15.12) and the taxpayer is entitled to Reduced Age Allowance (RAA). (The computer incorrectly calculates the Net Statutory Income (NSI) for RAA purposes)