Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Debt and return pursuit: Self Assessment: revenue determinations: consider raising a determination

You should only raise Revenue Determinations where you have information or believe there is tax due that should be accounted for through Self Assessment, and you can take prompt and positive action to enforce the debt. The fact that payment may not be made in full does not prevent you raising a Revenue Determination.

The purpose of raising a determination is to focus the taxpayer’s attention on the overdue return and encourage the taxpayer to file the return and pay what is due, or contact us for help. If this does not happen you can use any of the enforcement methods available to recover the debt.

Tax at risk

Any case that has an overdue return could be deemed to have ‘tax at risk’. When you are considering a determination the associated debt isn’t necessarily a greater ‘tax at risk’ because:

  • more than one return is overdue
  • the determined amount is a high value
  • it is a Failure to Notify case
  • the case is part of Compliance activity.

Cases deemed to have a high tax risk must be looked at, taking individual case circumstances into account, and a decision should be made based on the specific case details.

A high tax risk could be the timing or complexity in pursuing the debt, such as there is reason to believe tax is at risk: the customer may hide/move assets or move abroad to avoid paying the debt; the customer is Bankrupt and continues to trade post-Bankruptcy.

Note: It is important when considering prompt and positive pursuit to remember to take the whole debt into account; for example, the Revenue Determination, late-payment penalties, daily penalties, the following year’s payments on account, and any interest.

In particular Revenue Determinations will be appropriate in cases where

  • tax is at risk (for example where amounts were paid for the first and second payments on account but the return has not been filed)
  • the taxpayer refuses to file the return
  • claims to reduce payments on account have been made and the return has not been filed.

Always warn the taxpayer before you raise a Revenue Determination. The warning can be written or verbal. There is no legal requirement to leave a period of time between the determination warning and the issue of a determination, so for example you can warn the taxpayer verbally and request a determination on the same day.

Where an automatic IDMS99 is issued an automatic note will be made on IDMS Action History. When a verbal warning is given you should record the warning in IDMS Action History notes.

Note: There may be little point in continuing to raise determinations if returns are not being filed.

Interventions

Ideally allow for a customer response to interventions and then decide if a Revenue Determination is necessary. Interventions include late-filing penalties and contact from Compliance or Debt Management. Certain ‘at risk’ cases and bankruptcies require a more urgent approach.

Top of page

Legislative time limits

Two time limit requirements have to be met if you are to proceed with the determination:

  • the customer has to be served with a notice to file their return within the time limits allowed to serve such notices (see SAM121080)
  • determinations can only be raised before the end of three years from the filing date, once that filing date has passed.

Top of page

Check for lead interest in the case

You must not raise a Revenue Determination without first checking SA and IDMS notes and signals to establish if the case or tax year is working with Compliance (as an enquiry case), or any of High-Net-Worth (HNW), expatriate (Expat), Trust and Pension Scheme offices. HNW cases are recognised on the SA computer system by the CPR signal.

If so, liaise with them and confirm if a determination is appropriate, or if they have a calculated amount for you which must be based on ‘information and belief’ (see DMBM518040).

Whilst liaising with the relevant office, obtain contact details and any information relevant to helping the pursuit of the return and debts.

Top of page

Previous year liability is nil or shows an overpayment/no previous year liability

Where the taxpayer’s previous year’s liability is nil or shows an overpayment you should review the case carefully to ensure that raising a determination is appropriate. For example, the customer may have ceased SA in an earlier tax year and there is no need for a determination, so records need to be brought up to date instead.

Where there is evidence to suggest there is SA criteria and tax at risk for a year(This content has been withheld because of exemptions in the Freedom of Information Act 2000) :

  • raise a determination based on the information available
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Top of page

Authorisation levels

A DM officer of grade AO may authorise a determination where:

  • only one return is outstanding and
  • the determined amount is up to the amount of the previous year’s income tax liability plus 20%.

DM officers of grade O and above must authorise determinations in all other circumstances, for example two or more returns outstanding or additions of more than 20% of previous year.