Justin Stevenson

Written by: Justin Stevenson

Justin Stevenson

Associate Director

Digital ID measures could block the gateway for 30-day CGT reporting

It has been well publicised that since 6 April 2020, UK taxpayers  have just 30 days to report and pay any capital gains tax (CGT) due following the sale of UK residential property. To do this they must use a CGT on UK property account.   

However, in order to set up the 30-day CGT account, property sellers first need to set up a Government Gateway account and this is causing some problems, especially given the tight 30-day deadline. 

The sticking point for many comes at the end of the set-up process, where the taxpayer is required to prove their identity. To do so, both passport details and responses to credit-check style questions may be required. The credit-check questions can be extremely difficult for those with complex financial affairs to answer, and it appears they have been designed with little consideration for the end user’s circumstances.  

The questions include, for example:

  • When did you last take out a personal loan? 
  • When did you last take out a hire purchase agreement? 
  • When did you last take out a mobile phone contract? 
  • When did you last open a bank account? What is the outstanding balance on your mortgage?  

Each question has multiple choice answers, but difficulties arise, for instance , where the client has more than one mortgage - which balance is required? In terms of mobile phone contracts, it is common for parents to take these out on behalf of their children, so should these be included?  

Each question is also badly worded with the answers being either 1-3 years or 3-5 years, so if the answer is 3 years, which option is correct? Ultimately, if a client is unable to pass the credit-check questions, the Government Gateway account set-up cannot be completed and it is not be possible to file a CGT on UK property account online. 

A  paper return can be requested from HMRC, although it seems unlikely this would be issued in sufficient time to enable it to be completed and submitted within the 30-day deadline. It therefore seems unjust that potential penalties and interest could arise for those who have done their best to meet the deadline, with the further cost of professional fees to be incurred if they want to appeal.   

Clearly, as HMRC moves forward with its digital agenda, electronic proof of identification is a key issue. It seems that this may be becoming more of an issue, as covered in Noel Mooney’s recent article  in relation to repayment delays due to ID checks.   

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