Let property campaign – interest calculation again

Let property campaign – HMRC interest calculator n/a where tax returns not filed? / CGT and LPC?

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SALF303: “payments on account of a person's tax liability for a tax year are only required if they filed a tax return for the preceding year. They will not be required to make payments on account if they do not file a tax return for the preceding year.”

HMRC interest calculator, link at 3.1 at www.gov.uk/government/publications/let-property-campaign-your-guide-to-m..., assumes payments on account, so it should not be used where the offending taxpayer did not file tax return (and in some other cases.) This is not mention in the HMRC guide.  Is this correct, or are there different rules for LPC?

Second question: A taxpayer using LPC made a small chargeable gain back in 2007. Can it be included in LPC disclosure?

Thank you!

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By Dash6476
12th May 2024 12:01

HMRC do include interest on payments on account for the years included in a contract settlement, see EM6008. This is in line with their accounting for interest when using discovery powers, see s 59A(4B) TMA70. In theory they may also charge interest on payments on account for the year following the final year in the disclosure (EM6009 - this depends on whether a return has since been received and whether the balancing payment date has passed). If they are applicable and you decide to include them, you should clearly state this on the form, perhaps mention EM6009 and show your working, as most caseworkers don't seem to know about it and will just reject your disclosure for being too far over their calculated amount.

You can include the gain if it is in time, but if the disclosure form is as useless as the one that was used a few years ago where you have to lump everything together in one figure, I'd strongly suggest also writing a cover letter or email with all your calculations and making it extremely clear on the disclosure form that a cover letter is on the way.

Good luck, you'll need it with LPC!

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