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PTP TR - HMRC Exclusion ID 116 resulting from the Silver case

Article ID
kba-03766
Article Name
PTP TR - HMRC Exclusion ID 116 resulting from the Silver case
Created Date
8th December 2020
Product
Problem
It was announced at Budget (11th March 2020) that legislative changes would be made regarding the calculation of Top Slicing Relief (TSR). The new measure will introduce new rules allowing reduced personal allowances to be recalculated within the calculation for TSR. This will provide additional relief for taxpayers whose entitlement to the personal allowance has been reduced because a gain has been included as part of their income of the year. These new rules will apply to gains arising on or after 11th March 2020, however, we understand HMRC will also apply these new rules to all gains arising in 2019/20 as a concessionary treatment. It was too late to amend the 2019-20 tax calculation. As a result HMRC have added Exclusion ID 116 to their list of exclusions for online filing which can be viewed here:
Resolution

In these circumstances the tax calculation will be incorrect and a paper return may be filed along with a Reasonable Excuse form quoting HMRC Exclusion ID 116 as the reason https://www.gov.uk/government/publications/self-assessment-reasonable-excuse-for-not-filing-return-online.

A warning regarding HMRC Exclusion ID 116 has been introduced at the beginning of the FBI process to advise of this situation where applicable.  It is possible to proceed past this warning if deemed appropriate. 

It has come to light that this warning is not appearing as it should if multiple gains have been entered as opposed to a single gain.  Such returns may still be filed on paper with a reasonable excuse form if they meet the criteria for the Exclusion, despite the lack of a warning message.

The calculation will be corrected for 2020-21 in the April release.

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