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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Amend payment: claim to adjust payments on account: validity of claim to adjust payments on account

General

There are no restrictions on the number of claims to adjust payments on account a taxpayer or agent can make. There is, however, a time limit and this is explained below.

Where a claim is received it is only to be processed if it is valid - see subject ‘Processing a Claim to Adjust PoA’ (SAM1050). A claim is valid if it

  • Is in writing, including by fax, or made using SA Online
  • Gives a reason for reduction
  • Is received before the 31 January following the end of the tax year
  • States what the adjusted payments on account are or provides sufficient information to deduce the amounts - see ‘Rules for adjusting payments on account’ (SAM1110)

And, where made on paper

  • Is signed by the taxpayer or agent
  • Shows an acceptable year

Note: Forms SA303 completed using the i-form on ‘Your Tax Account’, ensuring all mandatory information is provided, can be submitted electronically and will be worked from a specific DMS queue. Alternatively, the customer may use the version available on Gov.uk. This also has mandatory boxes which must be completed before the customer can print the form and send it to HMRC. This version will also be worked from a DMS queue.

Reason for reduction

A reason for requesting a reduction in the payments on account must be given. The reason should explain why the taxpayer believes that reduced payments on account are payable.

A request without a reason is not a valid claim and is returned to the taxpayer with an explanation.

Where the reason is unsatisfactory, for example where the taxpayer says ‘I am unable to pay’, a valid claim has not been made. The request to reduce payments on account is, likewise, returned to the taxpayer with an explanation.

In both cases the request is turned down because it does not constitute a claim as set out in the legislation.

Notes:

1. Where a taxpayer says payments on account have been set up in the wrong amounts, the claim is to be dealt with by the processing office.
   
2. Where the reason is that a foreign national making a claim is covered by Tax equalisation arrangements (Regulation 102 case) the claim is to be sent to the taxpayer’s office responsible for processing
3. Where the reason is unsatisfactory, there is no question of a claim being disputed because a claim, as described in the legislation, has not been made.
4. Penalties may be charged where fraudulent or negligent claims are made.

Claim to carry-back relief

Where the reason given for a claim is that the taxpayer expects to apply or has applied for carry-back relief the claim cannot be rejected. Remember the legislation does not stipulate that the reason for the claim has to be valid. Although carry-back relief does not alter the self assessment for this or the earlier year and has no effect on the level of the payments on account for this year the claim should be processed.

Valid claim received

You should issue form SA614 (available on SEES in Forms and Letters) in all cases where a valid claim has been made by phone, or in writing, except where the claim has been made on a return. The SA614 warns the taxpayer/agent that we have not agreed their figures and they will be charged interest if the unpaid payments on account are in any part due. If the customer downloads and posts the form SA303 (claim to reduce payments on account) from Gov.uk, the form itself includes this warning so there is no requirement to send the form SA614 in acknowledgement.

Where a valid claim has been made online, the payments on account will be adjusted automatically and function SA NOTES automatically updated to record that the adjustment has been made.

Invalid claim received

If a request to adjust payments on account has been received in writing and is invalid, you should send form SA303 with SEES letter SA811 which covers the following circumstances,

  • Omissions on the form
  • No 64-8 in place
  • Invalid claim
  • Return already captured for that year
  • POA already adjusted to the same amount
  • Previous years return still outstanding
  • Previous years return captured but no POA requested

If a claim has been made online and is invalid, it will be automatically rejected and function SA NOTES automatically updated to record details of the claim and the reason for rejection.

Where a request to reduce payments on account is turned down, there is no question of a claim being disputed because a claim, as described in the legislation, has not been made.

Note: Penalties may be charged if fraudulent or negligent claims are made.

Any payslip showing nil or nothing due is returned to the taxpayer with a letter explaining how to make a claim. A part payment is not treated as a request to reduce payments on account if there is no indication that reduced payments may be due.

See SAM1050 onwards for instructions on how to process a claim to adjust payments on account