SA surcharge after enquiry

SA surcharge after enquiry

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An enquiry has just been concluded for 2005/06. There is additional tax to pay as a result but HMRC have accepted that there was no negligence.

The additional tax has been dealt with by an increase in the balancing payment for 2005/06 on the client's statement of account. The additional tax and interest from the due date has been paid. Most of the payment was made during the course of the enquiry when the likely figure became clear.

In these circumstances, is a 5% surcharge also payable as the payment of the tax has been made after 28 February 2007?

Answers appreciated.
Thank you.

Red Leader

Replies (5)

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By thehaggis
06th Jun 2008 17:20

Interest but no surcharges

Yes. If paid within 30 days.

Interest will normally run from 31 January, but if the original return reduced any payments on accounts that were paid for 06-07, these will be reinstated to their original amounts and interest will run from their dates of 31/1/06 and 31/7/06.

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By AnonymousUser
06th Jun 2008 11:46

interest but no surcharge?
Thank you for the replies.

Haggis,

Just to make sure I understand correctly, is it the case then in these circumstances that interest runs from 31.1.07 but no surcharge applies if the additional tax is paid within 30 days of the notice of closure?

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By thehaggis
06th Jun 2008 00:01

TMA
Due dates are at s55B - you are interested in sub-section 5(a):

(5) Where a person’s self-assessment under section 9 of this Act is amended under section 9(4), section 28A(2), (3) or (4) or section 30B(2) of this Act, any amount of tax which is payable or repayable by virtue of the amendment shall, subject to section 55(6) and (9) of this Act, be payable or (as the case may be) repayable—
(a) in a case where notice of the amendment is given after, or less than 30 days before, the day given by subsection (3) or (4) above, on or before the day following the end of the period of 30 days beginning with the day on which notice is given;

I think you have been given a notice of closure under s28A, and that the normal due date has passed. The due date for the amendment is therefore the day after 30 days from the date of the notice.

Surcharges apply by virtue of s59C. Sub-section 2 says:

(2) Where any of the tax remains unpaid on the day following the expiry of 28 days from the due date, the taxpayer shall be liable to a surcharge equal to 5 per cent. of the unpaid tax.

A further surcharge applies 6 months after the first surcharge.

Interest will accrue from the normal due date - usually 31 January following the year of assessment - to the date of payment.

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By User deleted
05th Jun 2008 18:14

Which act?
Hi Alan, Can you please provide any references to Acts under which it says no surcharges will be applied in such cases. Thanks

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By ACDWebb
05th Jun 2008 17:39

It should not be
so long as the additional tax is paid within 30 days of the amendment to the SA in closing the enquiry

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