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HMRC internal manual

Self Assessment Claims Manual

Claims involving two or more years: how is the payment of tax for the earlier year affected?

As explained at SACM11025, the claim does not affect the self-assessment of the earlier year. As that is so, the amounts due for that year remain payable on the normal due dates.

Payments on account should be made

* on 31 January within the relevant year of assessment and
* on 31 July following the end of the year of assessment.

Any balancing payment

* remains payable on 31 January following the end of the year of assessment.

Any late payment of the amounts due will attract interest under section 86 TMA 1970 and if paid very late, may attract a surcharge.

In the case of Norton v Thompson (SpC399), the taxpayer did not pay tax for the earlier year by the due dates and contended that the claim to relief under S380(1)(b) TMA 1970 reduced the tax payable for the earlier year. Consequently, the imposition of interest charges and surcharges were incorrect.

The Special Commissioner decided that

* the claim to relief did not operate as the taxpayer contended
* the claim related to the later year by virtue of paragraph 2(3) Schedule 1B
* any sums due for the earlier year were unaffected by it and
* the taxpayer had to pay the sums due by the prescribed dates or
* risk the imposition of interest charges and surcharges for late payment.

Where the taxpayer has not paid the sums due for the earlier year, he will not be entitled to a repayment as HMRC will be able to set off the amount due to him against the outstanding liabilities.