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HMRC internal manual

Debt Management and Banking Manual

Interest: Interest Review Unit (IRU): Miscellaneous taxes and duties: Special Assessments (S)

Special assessments (shown by the alpha character ‘S’ in the reference number) were sent, using the pre-SA computer system, for certain types of tax charges that did not fall into the normal Schedule D, CGT, IT-TI and Schedule E assessing rules.

Special assessments continue to be sent through that computer system for tax charges that cannot be made through the IT-Self Assessment tax system.

The rules for charging interest on special assessments depend on the type of tax and when the assessment was raised. Each type of special assessment has a unique identification code and this is used to find out the date from which interest is charged.

Assessments made on or before 5 April 1998Interest is charged on these assessments under the old ‘Section 86’ and ‘Section 88’ rules. See DMBM405010 onwards for guidance on how to handle any objection made on these assessments.

Assessments raised after 5 April 98Interest is chargeable on these assessments under the new ‘Section 86’ interest rules as extended by ‘FA95/S110’. The new ‘S86’ rules apply for all assessments made after 5 April 1998 regardless of the year being assessed, and say that tax will carry interest from the relevant date until paid. The relevant date will normally be 31 January following the end of the year being assessed, for example 31 January 1997 for a 1995-96 assessment. However there are some special assessments that continue to have their own specific rules for finding the relevant date for charging interest.

It is important to remember that because of these particular interest rules, the interest may already have been building up for a period of time before the assessment is actually made.

When considering an objection to interest for a special assessment, consider whether the correct relevant date for charging interest has been used.

If an incorrect date has been used, arrange for the interest to be recalculated, and the excess interest cancelled or additional interest added to the existing charge.

Where the taxpayer claims that HMRC delayed sending the special assessment or delayed trying to collect payment of the liability and this led to interest being charged, then we must carefully consider what events took place. See DMBM405010onwards about delay.