Determinations

Determinations

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A client has not submitted ITRs for many years.  He has paid all the penalties charged together with determinations but HMRC pestered him in the latter part of 2015 to get four years Returns in up to 05/04/14.

He gave me all the information and I have submitted them for 2011/12, 12/13, 13/14 and 14/15 but I have a dilemma with 2010/11. HMRC issued the following determinations;

2010/11 on 30/05/14 for £0 but he had already paid £1000 in respect of POAs for a previous year determination (total paid £1000).

2011/12 on 30/05/14 for £200 but he had already paid £1000 in POAs based on the previous year determination (total paid £1200).

2012/13 on 26/11/14 for £600 but he had already paid £1200 in POAs based on the previous year determination (total paid £1800).

2013/14 on 19/05/2015 for £360 but he had already paid £1800 in POAs based on the previous year determination (total paid £2160).

I'm happy that for 11/12 to 13/14 the actual liability for the year will supercede the determinations and his liability will be recalculated on actual figures which is more than the total paid already for the years concerned.  However I'm confused by the instructions at SALF209 (Sections 28C(5) and (6);

"No determination can be made after the period of three years beginning with the filing date. The 'filing date' means the 31 January filing date for electronic returns or, if the notice requiring the return is issued after 31 October, three months from the date of issue. The determination can only be replaced by an actual self assessment made within that time, or if later, within 12 months of the date of the determination"

​The actual 2010/11 liability far exceeds the amount determined but it seems that the submission of the Return won't replace the amount determined so should I still be submitting the Return?

Any thoughts would be appreciated.

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By mabzden
03rd Feb 2016 15:01

In general

Sorry, I'm a bit confused by the various dates and amounts you've quoted, and whether the amounts in the Determinations are higher or lower than the tax bills you've calculated.

However, in general and from what I remember, Determinations have the same status with HMRC as an actual tax return. So, once a Determination has been issued, the taxpayer is within his or her rights not to file the actual tax return if it would incur a higher tax bill.

If you choose not to file the actual returns, HMRC may view this as a sign that they under-estimated the tax due. They can't change the Determinations, but they could open an enquiry into a later year and try to find an excuse to go back into the earlier years if any information was missing from the return under scrutiny. So you need to make sure any actual tax returns filed for later years are complete and whiter than white to try to avoid this happening.

If you want to file the actual return voluntarily (because the Determination was too high) there are time limits for doing so - as set out in the quote near the end.

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By mbee1
03rd Feb 2016 15:07

The amounts determined are much lower than the tax due based on the actual Returns.

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By mabzden
04th Feb 2016 10:38

It makes you wonder...

... why HMRC bothers with Determinations, particularly for low amounts such as £200.

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