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HMRC internal manual

Air Passenger Duty

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HM Revenue & Customs
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Assessments and voluntary disclosures: Officers' assessments: procedure for making and notifying an assessment

What is the procedure for making and notifying an assessment?

Step 1

You should first decide whether to make an assessment.

Where an additional liability is established during the course of an audit, an assessment should be made. The only exception is where the amounts involved total less than £100. Generally, where the amounts fall below this de minimis limit, the trader should be asked to adjust for the errors in his records. However, if any of these errors are a persistent misdeclaration and you feel that the issue needs exceptional reinforcement, you may assess the trader regardless of this limit.

Any overdeclaration of APD discovered on an audit can be treated in one of two ways:

1. if the overdeclaration is below £100, the trader can adjust the overdeclared APD in his APD account, thus reducing the amount of APD which will be paid on the next return; or
2. for overdeclarations over £100, you should complete an APD641 as an overdeclaration of APD and the duty will be repaid to the trader on input of the APD641 in CCU.

Further guidance on when to make an assessment can be found in X-51 Civil penalties andassessments.

Step 2

Once you have decided to make the assessment it is important you allocate errors to the correct periods on the APD 641 assessment input form (see APD7240 for notes on completion). This is because the APD computer will automatically calculate any interest due from when the APD should have been paid to the day before the assessment issue date. Interest will continue to be added if the assessment remains unpaid.
 

Step 3

You should enter the amount of APD due from/to the trader an APD 641 next to the appropriate accounting period when the APD should have been paid/repaid.

For instance:

if in error the trader declares 500 passengers at £10 APD as an exemption in the accounting period 04/95. In addition he also enters the figures from his APD account onto his APD return incorrectly with a shortfall of APD of £3,000 in the period 10/96.

You should enter the underdeclaration of APD on the APD641 by the auditing officer is as follows:

04/95 £5,000
10/96 £3,000.

Step 4

Refer to APD5700 when considering inhibiting interest on assessments or voluntary disclosures. If interest is to be inhibited, the APD641 must be countersigned - see step 5.

Step 5

After you have completed the APD641 it must also be signed by a second officer. There is no requirement for assessment underdeclarations to be authorised by line management, the second signature may be that of the checking officer. In certain circumstances, countersignatory is also required. The functions of the checking and countersigning officer are detailed below:

  • the checking officer should ensure that the APD 641, supporting letter and schedule are completed correctly and accurately, paying particular attention to the arithmetical calculations. It is not the responsibility of the checking officer to confirm whether or not the assessment is technically correct. The checking officer may be a colleague or a line manager who has carried out the checking officer functions during the processing of the case.
  • countersignatory is required if interest is to be inhibited, there is a gross overdeclaration, or the assessment is being reduced or withdrawn. The countersigning officer should be appraised of the circumstances requiring the inhibit to be set and satisfied that the setting of the inhibit is appropriate. The countersignatory should be at the appropriate level - see APD12000.

Step 6

You should provide the airline operator with an explanation of the officers assessment in an appropriate covering letter and any necessary supporting schedule or schedules. Your covering letter should make clear the statutory basis of the assessment. It should also explain the operators right to a departmental review and give the contact address of the review officer. Depending on the circumstances of the particular case, you may choose to send your explanatory letter to CCU with the APD641 to be sent out by CCU with the Notice of Assessment. Alternatively you may ask the CCU to send the Notice of Assessment to you for issue with your explanatory letter.

Step 7

You should send the APD641 top copy to CCU Southend for input. And retain bottom copyof the form in the traders file.

Step 8

The input of the APD641 will produce a printed assessment in duplicate. CCU will send one copy to the trader and the other to the CAT. Alternatively, you may request that the trader’s copy of the Notice of Assessment be sent to you to issue with your explanatory letter - see step 6.

Step 9

On receipt of the printed assessment you should check that the original APD641 was input correctly by comparing the APD641 in the file with the printed assessment form from Southend.

If any errors are discovered, then:

  • provided the assessment has been made correctly, you can amend the notification using form APD642 – see paragraph 6.3.2 for procedures;
  • otherwise, you should withdraw the assessment using form APD 643 - see APD7330 for procedures.