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HMRC internal manual

Enquiry Manual

SA Surcharge: Mechanics of Imposing


TMA70/S59C only applies to the 2009-10 tax year, and any previous tax year.

See CH155000+ for 2010-11 and subsequent tax years

In law, a surcharge is imposed by “an officer of Revenue and Customs” and the taxpayer is to be served with notice of it, S59C(5).

Nothing in S59C indicates when a surcharge is to be paid, but S59C(6) says that it carries interest (EM4107) if not paid within 30 days of its imposition.

In practice, on the great majority of occasions that a charge to IT, CGT or Class 4 NICs is created on the SA system, the computer handles surcharges automatically. Sometimes some manual intervention is required. The guidance is in the Self Assessment Manual (SAM).

Most of the time, then, the enquiry officer can expect that if a case is being settled by formal statutory proceedings the computer will add surcharges to the SA statement and serve notices as required. The officer should however check the SA record and SAM to be sure.

In a contract settlement the enquiry officer will need to calculate any surcharges manually and bring them into the “expected offer” as appropriate, but again check the SA record to be sure of what has been done there.

In either event, remember

  • surcharges are “fixed” in amount and consequently never abated (for disclosure, co-operation, seriousness), EM4103 
  • there cannot be a surcharge and a tax/NICs-geared penalty - S7(8), S93(5), S95, S95A, FA07/Sch24 - on the same tax/NICs, EM4103 
  • accordingly, only the one or the other should be brought into a contract settlement. If it is to be the penalty, and the offer covers tax/NICs, interest and penalty, then any existing surcharge on the system will disappear automatically (along with any interest on the system) when the tax/NICs are informally discharged
  • and if proceeding formally, when such a penalty is determined, any existing surcharge on the same tax/NICs must be discharged
  • any surcharge formally imposed can be formally appealed, EM4108.