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Tax Determination & Time Limits

Tax Determination & Time Limits

One man band plumber..... hasn't done a tax return for the year to 5 April 2009 and HMRC have now raised a Determination of Tax Due for £6,000 - being estimated income tax and class 4 NIC.

Having looked at the plumbers records - I estimate the true amount of tax to be due for the year to be around £15k.

My opinion is he has two options:

1. Submit a tax return showing the true amounts of tax & NIC due prior to 31/01/2013 - being three years after the original filing deadline; or

2. Pay the £6k tax per the determination and after 31/01/2013 HMRC are out of time to amend it.

Does that sound right? Are there any other options?

Thanks in advance!


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05th Dec 2012 12:51

Tax determination & Time limits

The 31/1/2013 deadline is only relevant as where a return is required for 2008/09, HMRC have until 31/1/2013 to raise a determination. This they have done so this date now becomes irrelevant. So, option one is incorrect.

Additionally, the issue (and payment) of a determination does not negate the requirement to file the Return. HMRC will continue to pursue your client's Return by raising additional penalties until the Return is filed whether or not the determination is paid. So, option two is also incorrect.

Your only options are

(a) file the Return as soon as possible and pay the full amount of tax due as soon as possible. Remember interest and at least two 5%surchages will also be due.

(b) not file the return and continue to receive increasingly high penalties (whether or not the determination is paid).

Personally, I would go with (a).


Thanks (1)
By bus1ptk
05th Dec 2012 13:08



Just looking through SALF209 on the HMRC website and not the following:


Section 28C(5) and (6)

No determination can be made after the period of three years beginning with the filing date. The 'filing date' means the 31 January filing date for electronic returns or, if the notice requiring the return is issued after 31 October, three months from the date of issue. The determination can only be replaced by an actual self assessment made within that time, or if later, within 12 months of the date of the determination.


The bit in bold and underlined - I read as meaning we can submit a Tax Return showing the actual figures between now and the date 12 months after the determination was issued (which would be some time in October 2013). These replace the determination figures and become payable.


What happens if the client chose not to submit a return in this period - would the £5k determination stay as is? 

Thanks (0)
05th Dec 2012 14:24


Yes, I agree, you have 12 months from the date of issue of the determination to file a correcting self assessment, after which time, if none is filed, the determination will become final.

However, if you know the actual liability should be around £15k, you should be filing a return. 

Knowingly accepting an underassessment by HMRC will also expose the client to penalties under Schedule 24 FA 2007 and also raises money-laundering issues. It is not something I would recommend.

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