Self assessment ― estimates and provisional figures

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Self assessment ― estimates and provisional figures
  • Is the figure provisional or estimated?
  • Tax repayment
  • HMRC challenges the estimated figures
  • Amending the provisional tax return
  • No change to the figures originally reported
  • Revised figures
  • Enquiry into the provisional return
  • Penalties

Self assessment ― estimates and provisional figures

If the taxpayer does not have sufficient information to enable them to complete the tax return in the time allowed, they should include either a best estimate or a provisional figure. The taxpayer should neither leave a box blank nor enter ‘details to follow’ as HMRC will regard this as an incomplete return and the taxpayer will be liable to penalties for late filing. See the Self assessment filing deadline for income tax returns guidance note.

However, HMRC does not accept that the use of estimated or provisional figures is justified if the taxpayer makes little or no effort to obtain the final figures before the filing deadline and may challenge the completeness of the return if it is suspected that this may be the case (see below).

Note that in many instances, sole traders will not need to mark figures as provisional or estimated, provided that they meet generally accepted accounting practice (GAAP). Profits of a trade must be calculated in accordance with GAAP unless the trader has elected to opt for the simplified cash basis. See the Adjustment of profits ― overview, Tax relief for provisions and Eligibility for the simplified cash basis guidance notes.

Is the figure provisional or estimated?

There is an important distinction between estimated and provisional figures. A provisional figure is one which is the best available at the time the return is submitted (eg business accounts not yet signed off) and will be revised. An estimated figure is one which is the best figure that will be available at any time (eg the records have been lost).

If a provisional figure is reported on the tax return, HMRC should

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