New CGT rules drive more landlords to file CGT tax returns late

An increasing number of landlords are not filing their capital gains tax (CGT) paperwork in time, new figures have revealed.

A Freedom of Information request from the Financial Times discovered that 26,500 had missed the deadline in the 2021-22 tax year, up from 25,300 the previous year.

New rules introduced in 2021 reduced the time given to pay the bill from 22 months to 60 days. Last month, HMRC confirmed that landlords must file a CGT return – even if the disposal has already been reported on a self-assessment (SA) return.

Landlords risk a £100 fine for delays of six months and a £300 fine or 5% of any tax due, whichever is greater, for delays up to a year.

To meet the filing deadline – and given the difficulties with the CGT PPD system – many taxpayers and agents have already filed their SA return without first having filed the CGT PPD return.

The Institute of Chartered Accountants in England and Wales has asked that late filing penalties should take into account the six-month delay HMRC made in deciding how the returns should be filed.

Appeals jump

While HMRC declined to disclose the number of fines paid last year, it said nearly 4,000 appeals were processed in response to late payment penalties, a huge jump from about 600 the previous year.

This could partly be attributed to the fact that no charges were applied during the first three months of the reporting period in 2020, but lack of awareness is also thought to be a factor. HMRC said it had helped customers adapt by reaching out to industry press, holding landlord webinars and engaging agents.

Bill Dodwell (pictured), tax director at the Office of Tax Simplification, told the FT he wanted the government to do more to help taxpayers, including potentially involving conveyancers in passing on HMRC information.