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HMRC internal manual

Self Assessment Claims Manual

Consequential Claims after Assessment and Amendment: Non-Culpable Additions

Where you

  • amend a return in an SA enquiry closure notice or
  • make a discovery assessment for reasons other than fraudulent or negligent conduct

the taxpayer can make a relevant out-of-time claim or election within one year from the end of the year of assessment in which the notice is issued. (TMA70/S43A and 43C(2).)

In section 43A for a claim or election to be relevant to an amendment or assessment it must

  • relate to the same year of assessment or
  • be made or given by reference to an event in that year (TMA70/S43A(3)).

The taxpayer can also

  • revoke a claim or election already made, or
  • amend a claim or election, except where it is irrevocable in law.

The effect of the taxpayer making, revoking or amending a claim or election is limited to the additional liability to tax resulting from the assessment or your amendment.

So if an ITSA enquiry increases a taxpayer’s self assessment by £1,500 tax, the effect of any out-of-time claims or elections is limited to £1,500 (TMA70/S43B(3)). Any “excess” tax effect of the claim or election “shall not be available to reduce any liability to tax”.

Specifically excluded from S43A TMA by subsection (2A) are

  • elections as to transfer of married couple’s allowance (ICTA88/S257BA)
  • elections as to transfer of children’s tax credit (ICTA88/SCH13B)
  • elections for assets to be re-based to 1982 (TCGA92/S35).

Where the taxpayer’s action would alter the liability of another person, they will need the written consent of that other person (TMA70/S43B(1)).