Capital gains tax: changes likely to lead to errors
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Taxpayers will ‘inevitably’ make mistakes in their tax returns as a result of the government’s decision to change the main rate of capital gains tax at the last Budget, says ATT.
The announcement came after HMRC’s online filing service for tax returns had been finalised. As a result, calculations generated as part of completing the CGT section of a tax return will be inaccurate for affected disposals that occurred on or after 30 October 2024. Taxpayers will need to make a manual adjustment to their tax return to ensure the correct amount of CGT is calculated on such disposals.
The ATT warns that taxpayers who miss the guidance on these changes could be caught out, especially those who are not represented by an agent and fill out their own returns.
ATT’s Jon Stride said: ‘It seems inevitable that some taxpayers affected by the rate change will not realise the change of rates when using HMRC’s online filing service and will fail to include the CGT adjustment figure when filing their returns. This could result in HMRC questioning the tax return, and may lead to additional tax being payable, along with late payment interest and a penalty of up to 30% of any underpaid CGT.’