Changes ahead for ESC A19
HMRC has published plans to simplify Extra Statutory Concession A19, which deals with situations where the department has failed to act on information submitted.
The objective of the consultation exercise is to make ESC A19 more “user-friendly” and objective, but Anne Fairpo commented in last week’s (9 July) tax podcast that this “means they probably will take something away”.
The proposed changes will end concessions for exceptional circumstances within the tax year, and close off hope for those who had a “reasonable belief” their tax affairs were in order.
The great PAYE coding backlog of 2010 brought ESC A19 into the limelight as a last resort for taxpayers who found they owed significant amounts for underpayments going back several years. Yet in recent months the concession has sparked a number of queries and comments on AccountingWEB. Several practitioners report successes, but only after having to repeatedly point out where and when information was provided. According to “Mr Mischief”, it takes a lot of effort to penetrate the department’s fobbing off culture and get to individuals (and a specialist team reportedly based in Wales) to get considered for ESC A19.
Currently the ESC A19 is available where HMRC fails to act in a timely manner, or when the department notified the taxpayer 12 months after the end of the tax year to which the assessment applies, or where the taxpayer could have reasonably believed their affairs were in order.
The concession also included allowances for “exceptional circumstances” within 12 months of the tax year end, if HMRC failed more than once to use facts presented, or allowed arrears to build up over two consecutive tax years. Both these fallbacks will be removed