Taxpayers should not be lulled into a false sense of security by Government measures giving them more time to pay some taxes. Other new tax changes are still being enforced rigorously by HMRC.
One of these is the 30-day deadline for CGT on UK residential property. People who miss the deadline will face hefty penalties. We have found that many conveyancers aren’t informing property owners of the new requirements, so where does this leave the taxpayer?
Not all property owners are affected, because the sale of your main home does not usually lead to a CGT bill. The people most likely to be affected are buy-to-let landlords, those who inherit property, second-home owners and homeowners with extensive gardens/grounds. There were almost 85,000 property transactions in the UK during August 2020, and the chances are that a significant number of those would be subject to CGT.
Working out whether you are caught by these rules is only part of the struggle. Taxpayers who are ‘digitally excluded’ or ‘digitally challenged’ have not been able to set up Government Gateway credentials and a property account. Social distancing rules and restrictions on households mixing means that these taxpayers can’t always ask family members to help them in person. HMRC is now offering paper tax returns as an alternative, but only where the taxpayer calls HMRC and convinces their staff that they are digitally excluded.
Taxpayers who pay all their taxes via PAYE won’t have a tax advisor waiting in the wings to guide them, but is it up to the conveyancer to identify the ones that should pay CGT? In short, no it isn’t: it is up to the seller to work out what they need to do.
We call on HMRC to raise awareness of the new rules, with the added bonus of collecting some tax revenue sooner rather than later.