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HMRC internal manual

Self Assessment: the legal framework

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HM Revenue & Customs
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Self Assessment Tax Returns: sanctions against a failure to file a Tax Return: determination of Self Assessment where Tax Return not filed

Section 28C

Without a completed tax return HMRC do not know what tax to collect for the relevant year, or what payments on account are required for the following year.

In such cases HMRC have to make some form of estimate of the tax due.

The solution is a determination of the tax due which is treated as a self assessment, but only until the taxpayer files an actual tax return within the time limits set for superseding a determination. The taxpayer’s self assessment automatically replaces the determination without the need for an appeal or arbitration.

Determination of tax due

Section 28C(1) and (1A)

Where a tax return is not delivered on or before the appropriate filing date an officer of the Board may make a determination of the tax due. This determination must be made ‘to the best of his information and belief’.

Notice to be served on the taxpayer

Section 28C(2)

Notice of the determination must be served on the taxpayer, stating the date of issue.

The determination is treated as a self assessment until such time as the tax return is filed

Section 28C(3)

The determination will be treated as a self assessment until such time as the taxpayer files the tax return and a self assessment is made (whether by the taxpayer or an officer of the Board) for the relevant tax year (but see the time limits explained in Time limits for determinations and subsequent self assessments below). There is no right of appeal against the determination, but once the actual self assessment is filed it automatically replaces the determination. The tax charged by such a determination is payable and enforceable until it is replaced by a self assessment, at which point any tax overpaid will be repaid.

The due date for payment of the tax charged by the determination is the due date that would have applied if the self assessment had been filed on time. This tax will also set the level of the payments on account required for the following year.

Section 28C(4)

Any recovery proceedings underway at the time the actual self assessment is filed may continue, but with the substitution of the estimated amount by the sum shown in the taxpayer’s self assessment.

Time limits for determinations and subsequent self assessments

Section 28C(5) and (6)

No determination can be made after the period of three years beginning with the filing date. The ‘filing date’ means the 31 January filing date for electronic returns or, if the notice requiring the return is issued after 31 October, three months from the date of issue. The determination can only be replaced by an actual self assessment made within that time, or if later, within 12 months of the date of the determination.