Hi, I have a new client for whom I prepared the April 2018 tax return in December 2018, resulting in a modest £56.00 tax refund. HMRC have now applied this refund to a liability on her account for 1997/98. Looking into the detail, I believe she did not submit a tax return for 1996/97 (she thinks she was out of the country from 1997 to 2006) so HMRC applied a determination of £1,000. As a result, her 1997/98 account shows two expected payments on account of £500.00 each. And it it one of these payment on account that HMRC have applied the refund to. Previously the account 1996/97 and 1997/98 showed the debt as "no longer being pursued" I have written to HMRC, they suggest submitting the 1996/97 return - but the client has no information. Does anyone have any suggestions?
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All the note means is that they are not actively pursuing the debt but they will obviously keep the money, what else would you expect?
If the client has no info how can she be sure the assessment is not correct?
What liability have those payments on account been applied to? Surely there would have had to be a 97/8 determination, too, otherwise they are payments on account of.....what?
You miss my point. Although payments on account are calculated by reference to the PY liability, they are payments towards the CY liability. That being the case, there has to be a CY liability to set those payments against. If there has been no self-assessment and no determination, then there is no such liability.
You'll probably find that you are on a hiding to nothing with regards to the year with a determination. A Return at this late stage is unlikely to displace that determination.
However, for the following year with no determination, arguably, a Return could displace the payments on account.
It seems to me that for £56.00 it would cost far more than it's worth to get it back, even if that is possible