Surcharge on CGT

Hi,

I'm hoping to get some advice on what I think is an incorrectly applied CGT surcharge.
In May 2011 I disposed of some shares. I neglected to make a CGT payment until February 2012. This payment included the penalty interest.
At the same time I also submitted the CGT return form.

Today, I received a letter from the Revenue stating that I have to make a further payment. This arises from a 10% surcharge: "Add surcharge for late submission of return".
I understand that the 10% surcharge should apply to late filing of a return, but my return was filed in time - it was the payment that was late.

Have I misunderstood how this works or do I have grounds for an appeal?


Many thanks.

If you sold shares in May 2011 you aren't due to file the return for this disposal until 31/10/12.

When you say you submitted a return form, what do you mean? I doubt the 2011 CG1 paper return forms weren't in circulation by February, so perhaps you've filed a CG1 that was processed as a 2010 return? (In which case the assessing software would believe it is late and surchargeable.)

Your first step should be to check what period the assessment / balancing statement you've received relates to. If it says 2010, then they've assessed you for the wrong period, and it'll be easily fixed.

If it is a 2011 assessment then it's very strange, because it should'nt really be possible to surcharge 2011 yet! But again it should be easily fixed by speaking to a person in your local tax office who deals with CGT...

Thanks mandelbrot.

The header on the letter I received today is:
Notice of Assessment to Capital Gains Tax for year 2011.

However, the field 'Tax Due 15/12/11' contains the total inclusive of the surcharge, which doesn't make sense as the surcharge could not have been due then.

Now that you mention it, I remember thinking it strange that I couldn't find a link to the 2011 CG1 form. I asked a friend and he mailed me the form which I filled out - so it's very possible I used the 2010 form. If so, then your explanation makes a lot of sense.

I will send a letter to the Revenue asking them to recheck.

Thanks again for your help.

For years of assessment 2009 and subsequent years the initial period is the interval from 1 January to 30 November in any year of assessment.
The payment date for disposals in this period is 15 December in the same year.
The month of December is the later period and tax for that period is payable by the following 31 January.

Even though the return is not due till the following year, the liability is due as above.

Gervan said:

For years of assessment 2009 and subsequent years the initial period is the interval from 1 January to 30 November in any year of assessment.
The payment date for disposals in this period is 15 December in the same year.
The month of December is the later period and tax for that period is payable by the following 31 January.

Even though the return is not due till the following year, the liability is due as above.

Click to expand...

Yes, but late payment results in interest; surcharge only applies to late filing.

OP, just ring your tax office and speak to someone in the CGT section, it'll be fixed in 5 minutes.

Thanks again!