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HMRC internal manual

Enquiry Manual

Working the enquiry: general payments on account: introduction

Where you have established that the tax self-assessed is insufficient, but you have not yet completed your enquiries, you should normally ask for a payment on account unless the circumstances in EM1940 apply. You must also follow the SAFE guidance at EM1938.

If the taxpayer declines to make a payment voluntarily and significant additional liabilities have been clearly established, you should consider making a jeopardy amendment EM1950+ and/or discovery assessments EM3250+ so that non-postponed amounts can be formally determined.

It is important to request payments on account in any case where additional liability is likely to be material. Such payments

  • indicate to the taxpayer the seriousness of the enquiry. Making payments has an immediate and tangible impact: the enquiry is no longer about a payment which may be made in the future
  • reduce the eventual net liability for the taxpayer, because interest ceases to accrue. It is only fair that this should be pointed out and be taken into account when considering the abatement for co-operation EM6075 for periods before the start of penalties under FA 2007 and FA 2008. If you are dealing with penalties under FA07/SCH24 or FA08/SCH41, whether or not the taxpayer makes appropriate payments on account does not affect the reduction for quality of disclosure CH82400+
  • ensure that HMRC does receive payment. It is preferable to obtain money as the case progresses rather than having to negotiate a final settlement for duty, interest and penalties with a taxpayer who has insufficient liquid assets at that time
  • are a further indication to the taxpayer and his/her agent that you are in control of the case and have your eyes firmly fixed on a proper settlement.

The total payments on account should be reviewed from time to time, and should not normally exceed the potential liability to tax and NIC. They can include tax and NIC which would only be recoverable on ETL assessments if you are satisfied that such assessments could be made.

A SAFE nominee or, if you work in Local Compliance, the Centralised SAFE Team, can check what payments are held in SAFE.