Consequential Claims after Assessment and Amendment: Non-Culpable Additions
- 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)).