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CGT changes likely to lead to errors, says ATT

1 September, 2025

Taxpayers will “inevitably” make mistakes in their tax returns as a result of the Government’s decision to change the main rate of capital gains tax at the last Budget, says the Association of Taxation Technicians (ATT).

The Chancellor announced increases in the main rates of Capital Gains Tax (CGT)1 on Budget day in October 2024 which, unusually, took effect that morning.

The announcement also came after HMRC’s online filing service for tax returns had been finalised. As a result, calculations generated as part of completing the CGT section of a tax return will be inaccurate for affected disposals that occurred on or after 30 October 2024. As a result, taxpayers will need to make a manual adjustment to their tax return to ensure the correct amount of CGT is calculated on such disposals.

The ATT warns that taxpayers who miss the guidance on these changes could be caught out, especially those who are not represented by an agent and fill out their own returns.

Jon Stride, Chair of the ATT's Technical Steering Group, said:

“The spontaneous increase in the main rates of CGT from the morning of Budget Day, part way through the tax year was highly unusual – the last mid-year change took place in 2010. This will catch many taxpayers by surprise.

“The announcement also came too late to alter the CGT pages of the tax return to reflect the in-year rate changes. As a result, for most disposals (other than residential property where there was no increase in rate) taking place on or after 30 October 2024, the CGT calculated will be incorrect if relying on the HMRC tax-return filing service alone.

“The rate increased from 10% to 18% for gains falling in the basic rate, and from 20% to 24% for gains falling in the higher and additional rate bands

“HMRC has provided an online calculator to work out the necessary CGT adjustment for affected disposals, but we are concerned that the guidance on this may not be noticed, and taxpayers may miss the reference to the tool while completing their tax returns and may not read HMRC’s CGT notes2 which explain the issue.

“It seems inevitable that some taxpayers affected by the rate change on 30 October 2024 will not realise the change of rates when using HMRC’s online filing service and will fail to include the CGT adjustment figure when filing their returns. This could result in HMRC questioning the tax return, and may lead to additional tax being payable, along with late payment interest and a penalty of up to 30% of any underpaid CGT.”

Data for the 2022/23 tax year showed around 370,000 taxpayers had CGT liabilities, representing just 3% of all those who filled out tax returns.

Jon Stride added:

“Relatively few people pay CGT as a proportion of the Self-Assessment population, and an even smaller proportion of the wider taxpaying public. Even among those who file tax returns each year, most won’t pay CGT every time, so taxpayers are unlikely to be aware of this mid-year rate change.

“Anyone with CGT to report should remember to include the correct disposal date for all CGT transactions in their return. This could avoid HMRC wasting time and resources checking a date for a disposal which took place before Budget day last year, so isn’t affected by the rate changes.”

Notes:

  1. Treasury policy paper: Autumn Budget 2024.
  2. HMRC: Capital Gains Tax summary notes.