HMRC software – allows coding out in error
HMRC are trying to fix an error with its online self assessment software which allows taxpayers to select an option that should have been disabled on 31 December 2008.
The error allows taxpayers who have a tax liability of up to £2,000 for the 2007-8 tax year to defer making a payment by the 31 January 2009 deadline. Instead, taxpayers are being permitted to elect, whilst completing the online tax return, to pay any monies due using their 2009-10 tax code. This option was suppsed to only be available until 31 December 2008.
HRMC are investigating the reason for this software glitch. HMRC have stated that taxpayers cannot use this option in January and should pay any tax due.
It is unclear how this issue will be resolved as there is likely to be a significant number of taxpayers who will have selected this option during January 2009. Strictly, HMRC could levy interest and surcharges on the unpaid tax however we are expecting further details from HMRC shortly as to how they intend to resolve this issue.
Taxpayers who use third party software are not affected by this problem.