Time limits for income tax determination
Our client's income tax return for the year to 5th April 2008 was filed late by paper on 28th May 2012. This client appointed us in December 2011 and only gave us the records on 26th April 2012 for us to prepare the 2007/08 accounts and tax. To my knowledge there are no extenuating circumstances for the client to be late in getting the accounts ready .
HMRC issued a determination of tax in May 2009 and determined the tax liability at £120,100. The 2008 tax return prepared showed the actual liability to be £78,569, so the tax was overcharged by £41,531.
HMRC's guidance & Section S28C(5) and (6) state that a determination can only be replaced by an actual self assessment made within three years from the filing date for the 2007/08 tax return,. The deadline therefore seems to be 31st January 2012 for replacing the £120,100 determination. As the 2008 return was actually filed on 28th May 2012, it seems that we were out of time and HMRC will NOT process the 2008 return submitted and replace the tax determination with the actual figures of £78,569. This means that our client will be £41,531 worse off by not attending to his tax return within the 3 year period.
Does anyone have any experience of this ? Is there any other way or any other tax provisions to allow us to extend the three year deadline or to allow us to have the 2008 tax determination replaced with actual tax return figures ?
Any comment would be appreciated.
- FCA regulated company in a small group 362 1
- Are you going to Xerocon? 1,097 27
- Questions from Liquidator 2,175 23
- Really?! 276 4
- Legal Fees Allowable in dispute 334 7
- Is the CT61 return dead? 115 3
- How did you recalculate your payroll fees 794 10
- Entrepreneur - want to submit accounts by myself 984 14
- HMRC site still hasn't updated for January SA filings 531 8
- SSP and Contractual Sick Pay Query 355 9
- Commercial Premises Purchase using Company Profits 488 13
- Company Car for Owner Director number crunching - is there a ready reckoner? 367 4
- Property letting & CAs 438 1
- Share capital - death of a shareholder 552 18
- Viewing folder contens en masse 289 7
- HMRC time to pay and bailiff letters 491 6
- Separate companies same Director buy from each other 511 10
- Bench-marking software, any ideas? 339 6
- No Contact From Client - When to Disengage? 403 2
- Car benefit or not? 1,658 17
- Self employed and HMRC Worldwide Subsistence Rates 696
- 2015 tax year end 423
- Interest paid - do new rules affect Tax Credits? 403
- Self employed consultant working in Ireland 336
- Costly Accounting Software contract 280
- Market Invoice (P2P invoice discounting) tax treatment 247
- Directors' advances and credits 235
- DTA tie-breaker issue 233
- Tax on internet ad sharing income 214
- Credit against UK NI for NI paid to EEC Countries 196