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HMRC internal manual

Debt Management and Banking Manual

Ordinary Cause: Averaging claims and claims for set-off of franked investment income

Assessment on farmer or market gardener – averaging claim

Where a late claim to relief is received for an assessment raised on a farmer or a market gardener and an averaging claim is received ask the local service office whether the assessment was determined on appeal.

Assessment under appeal

If the assessment is still under appeal, or a late appeal is accepted and an amount of tax/NIC payable is agreed, follow the procedure for late applications to postpone (DMBM681940).

Appeal determined

If the assessment has been under appeal but this is now determined, tell the defender that the tax/NIC may be held over, but interest may be charged on any unpaid amount found to be payable. If the service office is unable to settle the claim quickly you may suspend the court action as long as the defender has not lodged a notice of intention to defend.

Assessments under Schedule 13/Para 3(2) or Sch13/Para 3(3), or Sch16/4(1)b or 4(2)ICTA1988

Where the company claims set-off of franked investment income under paragraph (5) of Sch13 or Income Tax borne by deduction under paragraph (5) of Sch16, tell them that you will suspend the proceedings provided they make immediate payment of

  • the balance of tax payable after set-off
  • interest on the amount set-off, to the earlier of the date of set-off or the date of proceedings


  • the full costs of the proceedings.

If the company is not prepared to make payment tell the company that you are continuing the proceedings under paragraph 6(3) of Sch16 as appropriate.

In all cases

  • maintain close liaison with the local service office
  • give effect to any adjustment once the claim has been settled
  • remember that the due and payable date for interest purposes is unaffected.