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HMRC internal manual

PAYE Manual

Reconcile individual: HMRC delay: ESC A19: who is eligible?

Only arrears of personal income tax, class 4 NIC and capital gains tax may be considered. ESC A19 does not apply to any other tax or contribution. ESC A19 applies where there are outstanding arrears of tax. If a taxpayer contacts HMRC about the concession, but the tax has already been paid, the application should be refused as there are no arrears to consider, unless one of the conditions below is met.

Customer requests ESC A19 and then pays tax due

If the customer makes a payment on account at the time of making their complaint and they meet the conditions of the concession then the tax can be repaid.

If the taxpayer appeals against an earlier decision to refuse ESC A19 and that decision is over ruled and the customer has paid the tax in full, part paid by voluntary payment or through their tax code, we can consider repaying the tax, if all the conditions of ESC A19 are satisfied.

Customer pays tax due and then requests ESC A19

If the customer paid the tax before requesting consideration under ESC A19 and you are satisfied that the customer believed they were coerced or misled by HMRC into paying before their request has been reviewed, then the tax can be repaid.

Class 4 NIC is not specifically mentioned in the concession but it has always been HMRC policy to include it if any tax under Self Assessment is being given up under ESC A19.

If there is more than one reason for an underpayment of tax, a notional credit can be recorded against the proportion of tax that is due to HMRC failure to act on information about the particular source of income. Any balance should be collected from the taxpayer.

Only the net underpayment of tax in any year should be considered.

For example, if underpaid tax of £500 is requested to be given up under ESC A19, but during your review of the matter you identify that additional tax relief is due for £200, then you should re-reconcile the tax calculation. If all the conditions of ESC A19 are met, then the tax of £300 can be given up by recording a Revenue Loss (PAYE90030). You should inform the taxpayer why the reduced figure has been given up.

But, see PAYE95035 if there is an overpayment available for set off from another year.

You should not assume that tax can be given up in the absence of evidence that HMRC failed to act on information received about a source of income which affected the taxpayer’s coding (PAYE95045).