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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Returns: individuals returns: repairing obvious errors: individuals

General

At any time before the end of a period of nine months beginning with the day on which the taxpayer’s return is received you may repair that taxpayer’s self assessment to repair any mistakes or obvious errors in the return.

Obvious errors include those shown up on the computer whilst entering return details. Examples include arithmetical errors or the carry forward of the wrong figure from one box to another or the omission of information we hold on our systems such as Pay, Tax, Benefits and accounting information. The `Credibility Check’ at the end of capture may prompt you to check the figures entered if the calculation shows a result that you were not expecting. More information can be found at subject `Credibility Check’ (SAM121430).

Small mistakes should not be repaired, the error may be over-ridden and you should accept the taxpayer’s figure (SAM121265). For example if the return entry is round pounds do not repair the entry to include pence.

Where the amount of tax deducted from investment income is incorrect, or there is an arithmetical error, it will not be obvious which box or boxes contain the wrong figure(s). If, using your judgement, you consider the amounts to be small, you should accept the taxpayer’s figure in the gross income box.

The computer does not have any upper limit on the amount that can be repaired.

Underpayments coded out 2004-05 onwards

The computer will initially, in all cases, show the relevant details extracted from PAYE in view boxes 7 and 8 of the Tax Calculation or boxes 2.6A and 2.6B (Short Tax Return (SA200)). These details will have been extracted from PAYE near the end of the tax year for which the return is being captured. Where the information held on PAYE is 0 (zero), then the computer will show 0 (zero) in the relevant view box at 7 or 8 of the Tax Calculation (SA100) or 2.6A and 2.6B (SA200).

For Revenue Calculation taxpayers, you should enter in the capture boxthe details already extracted from PAYE and shown in the view boxes. This is not a repair as the boxes are not required to be completed by taxpayers requesting Revenue Calculation. This is a change other than a taxpayer amendment resulting in a change in liability, and is treated as a correction to obvious errors. If the return has been captured, deal with such changes as an amendment and use function AMEND RETURN. Note: Although this is not treated as a repair the time limit for entering or amending amounts in these boxes is subject to the same 9 month time limit.

For Self Calculation taxpayers, you should enter in the capture box either the details already extracted from PAYE, and shown in the view boxes, or the taxpayer’s figures. If the details captured are different to those entered on the return in TC 1 boxes CAL 7 and 8, or the return details are missing, you must correct the return amounts and explain the revision to the taxpayer in a letter and by using a Customer Service Message.

State Retirement Pension received 2006-07 onwards

The computer will initially, in all cases where the NIBACT signal is set, show the relevant details extracted from PAYE in view box 7 of the Income section (11.1 for 2006-07 or box 4.1 (Short Tax Return (SA200)). These details will have been extracted from PAYE near the end of the tax year for which the return is being captured. Where the information held on PAYE is 0 (zero), then the computer will show 0 (zero) in the view box at 7 of the Income section (SA100) or 4.1 (SA200).

If there is no figure in the pre-populated box or the box shows xxxxx, you should check NPS for the amount of NIB and compare it to the figure entered by the taxpayer.

  • If it is the first year of state pension, make your comparison between the return figure and the actual NIB from NPS (not the pre-populated annual figure from the code number). Check Contact History for P46(DWP) details and if necessary, SA Notes
  • If the taxpayer has left INC 7 blank but there is an entry in INC 15 (total of any other taxable state pensions and benefits), enter 0 (zero) in box INC 7 and capture INC 15 as seen
  • If NIBEST is set on NPS and you do not have the details to confirm the actual NIB on the record, accept the taxpayer’s return figure and up-rate the amount in the code number, if appropriate
  • IF NIBACT is set on the NPS record, use that figure for your comparison
  • If the return is for the year to date of death, make your comparison between the return figure and the apportioned NIBACT figure to date of death
  • If the taxpayer’s figure is higher than the pre-populated figure or, is up to £150 less than the pre-populated figure, accept the figure without correction
  • Revenue Calculation cases: If the difference is greater, enter the HMRC amount but do not note as a repair. Add the Customer Service message

‘The wrong figure of state pension/state benefits was entered at (box 7 of the Income section page TR 3 (SA100); box 4.1 (SA200)) of your tax return. In future if you do not have all the details to complete this box on your tax return, you can ask your Benefits Office for form BR735. Please tell them which year you need the information for.’

  • Self Calculation cases: Repair the return details to include the correct amount payable (NIBACT). Select the general repair message

‘Should be the amount of the entitlement.’

Taxpayer’s self assessment

If you capture a return where the taxpayer has self calculated and you have made repairs to that return that affect the amount in boxes 1 and 2 of the Tax Calculation Summary page TC 1, you will not be able to accept the taxpayer’s self assessment amount in TC 1 boxes CAL 1 and 2 unless you remove the repair annotations from the return.

However in all cases you must take care when presented with the error message on TC 1 boxes CAL 1 and 2 where a difference arises between the taxpayer’s amount and the computer calculated amount, see subject ‘Repairing Tax Calculation Summary Box 1 and 2’ (SAM121520).

Explaining the repairs

We must not carry out a repair or correction without notifying the taxpayer that we have done so. If you annotate the repaired entry with an ’R’ during capture of the information in LDC, a repair (revision) notice will be issued automatically.

If you make a correction using information already held on our systems, you must give a customer service message and also advise the customer, and the agent if there is one, in writing to advise what you have changed and why. For more information, see the relevant PT OPs Action Guide.

The details of the repair(s) together with the reason(s), forms the Revision Notice on the Tax Calculation. You can select standard repair explanations or if these are inadequate write an explanatory letter. If there are more than 10 repairs (or more than 10 Customer Service Messages, or the total number of repairs and messages exceeds 10) the Tax Calculation will refer the taxpayer to a letter which you should prepare for separate issue. You can obtain a screen print of the abbreviated repair reasons or copy them into a separate document to help you write your letter.

Taxpayer objects

A taxpayer has the right to reject our repair to an obvious error. The rejection must be in writing within 30 days of the issue of the Revision Notice notifying the repair. The legislation is at 9ZB(4) and (5) TMA1970.

If an agent is acting a rejection can be accepted from the agent.

If a taxpayer has filed their return on time, they can amend that return within 12 months of the filing date. In these cases they are not limited to the 30 day rejection rule.

In practice the 30 day rejection rule will only be applied where a return is filed 11 months after the filing date or later.

The repair of one entry may have a knock on effect to a subsequent entry, where this happens you need only note the original entry as a repair.

Information used in making a repair

From 1 April 2010, HMRC gained increased scope to correct obvious errors under S9ZB TMA. This legislation, in addition to the existing powers, now allows an officer to amend a Self Assessment return to correct ‘anything else in the return that the officer has reason to believe is incorrect, in the light of information available to the officer’.

This extends to Pay, Tax, Benefits and accounting information so if, for example, an Employment page is submitted which omits details of car and/or fuel benefits or the figures entered for Pay, Tax or State pension are obviously wrong, those details can be corrected using the information held on our systems during capture. Information supplied by the taxpayer or agent (first party information) with the return, for example in a letter or on a form P60 or P11D, may be used to repair an obvious error, including additional information on the return.

When such amendments using information we hold are made, you must write to the customer, or agent, to tell them what you have corrected and why. Note: If the information cannot be checked against information held on our systems, you should not change the customer’s figures. Alternatively, if you cannot successfully capture the return, you must decide if the return should be considered as unsatisfactory and send it back, if appropriate.

This also applies where you identify that a customer has made an error when dealing with correspondence from the customer. If you identify that the customer made an obvious error when completing the return and it was not identified or repaired at the time of capture, a correction can be made without the customer asking for an amendment in writing. In those circumstances you should send SEES letter SA806 to the customer to advised what has been corrected, and why.

Repairing a return after 31 December

If you are processing a return after 31 December following the end of the return year and you need to repair an entry or entries, and that repair(s) increases the taxpayer’s liability (This content has been withheld because of exemptions in the Freedom of Information Act 2000) and no repayment is due, do not make any repairs to the return when using function CAPTURE RETURN.

Further information is available on repairing a return after 31 December following the end of a return year see subject ‘Repairing Returns After 31 December: Individuals’ (SAM121540).

General guidelines

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