AAT calls for 30-day Capital Gains Tax reporting limit to be doubled

AAT is increasingly concerned about changes to reporting requirements for Capital Gains Tax (CGT) on residential properties and has called for the new reporting requirements to be doubled from 30 to 60 days.

Changes which came into effect in April 2020 require anyone with a reportable gain on UK residential property to report and pay any tax due using a Capital Gains Tax on UK property account within just 30 days of selling it.

Previously, gains could be reported in a self-assessment tax return in the tax year after the property was sold.

For accountants to undertake this work on a client's behalf, they need specific authorisation from their client, which must be gained using an agent services account and emailing authorisation links to clients for them to create a Government Gateway account.

As a result of these changes, many AAT Licensed Accountants have expressed their concerns about both the incredibly tight timeframe for reporting any CGT liability and a widespread lack of awareness amongst those selling residential property. AAT members have also reported issues accessing the Government Gateway.

Ann White FMAAT, Director, Abacus Accountancy and Payroll Services, said: "HMRC hasn't given this enough thought. I can see that they want to get money into the coffers earlier, which isn't necessarily a problem, but a 30-day deadline isn't very long between completing on a property and assessing what the gain is. The majority of solicitors I've dealt with also didn't know that this requirement is now in place, and neither do many of my clients – causing them to panic and in some cases have to pay a fine. It's also a long-winded process for accountants to get authorisation for clients to do this."

Mark Harwood FMAAT, Managing Director, Michael Harwood & Co Chartered Accountants, said: "We're concerned about the lack of awareness. We're seeing clients who have had property transactions and haven't been made aware of this change in legislation. The 30-day deadline is very tight when you're dealing with the sale of a property and have to register, calculate and pay the tax in that time. If you know about the transaction, it's achievable, but to suddenly find out you should have done something is a problem. Ultimately it's not being publicised enough – we need to raise awareness of the change in order to make it work."

AAT has raised members' concerns about this with both HMRC officials and the Financial Secretary to the Treasury, recommending that the CGT reporting period be doubled to 60 days.

Phil Hall, Head of Public Affairs and Public Policy, AAT, added: "Since this change came into effect last year, AAT has repeatedly highlighted its members' concerns, particularly AAT Licensed Accountants, with the unreasonable nature of this new 30-day reporting requirement. Although we're working with HMRC and other professional bodies to improve guidance in this area, we remain convinced that the most effective solution would be to double the reporting period from 30 to 60 days."

More information about changes to reporting requirements for CGT on residential properties is available in the AAT Comment article Time to change the 30-day deadline for Capital Gains Tax.