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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
Updated
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Repayments: issue repayment: schedule 1B claims - additional repayments (Action Guide)

When you want to make an additional repayment of the relief arising from a Schedule 1B claim for losses and / or pension contributions, follow steps 1 - 8 below.

Note: Two examples are available at the end of Step 8.

For details of how to access any of the SA functions, select ‘Index Of Functions on the left of the screen.

1. Check
   
  * Is this a request for repayment of tax retained against liabilities due at a later date for a claim already processed? If yes go to step 2 
* Is this a new or amended claim? If yes, you must first process it by following the guidance in subjects ‘Claims: Involving two or more years’ (SAM114060) and ‘Claims: Carry back of losses / pension contributions (SAM114010). You must also take account of any local practices such as those involving claims for Film Industry losses  
2. Note down the amount of the claim
3. Establish the overall amount of the liability for the earlier year payable through the SA account (for instance the total due for the 1st and 2nd payments on account plus the balancing charge debit)
  * If the amount of the claim is greater than the overall liability for the earlier year payable through the SA account, no additional repayment is due
* If the amount of the claim is equal to or less than the overall liability for the earlier year payable through the SA account, go to step 4   
4. Note down how much of the claim has been / is due to be repaid by the current process
5. Establish how much of the earlier year’s liability has been paid by the customer
6. Subtract the amount of the claim that has been / is due to be repaid by the current process from the amount of the earlier year’s liability already paid. This is the additional amount of relief to be repaid
7. Use function ISSUE REPAYMENT FROM OVERPAID BALANCE to issue any additional repayment
8. Make an entry in function MAINTAIN SA NOTES of the amount and reason for issue of any additional repayment

Examples

Example 1. Relief exceeds the liability due for payment through Self Assessment Account and there is tax deducted at source.

2007-2008 first POA of £3,000 - paid in full on 31/02/2008

2007-2008 second POA of £3,000 - due on 31/07/2008 (not paid at time return captured)

2007-2008 Return received and captured on 10/05/2008. Claim to carry back relief from 2008-2009 of £9,000

2007-2008 BCD of £1,000 due on 31/01/2009

2007-2008 Tax deducted at source £3,000

2007-2008 Total tax due from all sources £10,000

When the return was captured the following freestanding credits (FSC’s) were created

* One FSC for £1,000 with an EDP of 31/01/2009
* One FSC for £3,000 with an EDP of 31/07/2008
* One FSC for £5,000 with an EDP of 10/05/2008

The FSC for £5,000 will have been automatically repaid and the remaining two FSC’s retained to settle the second POA and BCD when they become due.

No further repayment should be made as the amount repaid (£5,000) already equals the tax paid through the SA account (first POA of £3,000) plus the excess covered by tax deducted at source (£2,000).

Example 2. Relief less than the liability due for payment through the Self Assessment account.

2007-2008 first POA of £1,200 - paid in full on 31/01/2008

2007-2008 second POA of £1,200 - paid in full on 31/07/2008

2007-2008 BCD of £3,000 due on 31/01/2009

2007-2008 Tax deducted at source £2,000

2007-2008 Total tax due from all sources £7,400

When the return was captured the following freestanding credits (FSC’s) were created

* One FSC for £3,000 with an EDP of 31/01/2009
* One FSC for £1,000 with an EDP of 30/09/2008

The FSC for £1,000 will have been automatically repaid and the FSC for £3,000 retained to settle the BCD when it becomes due.

If requested, £1,400 of the FSC of £3,000 held on account can also be repaid, so the total amount repaid would be £2,400 (that is the amount of tax paid through SA). This will leave a credit of £1,600 on the account and the taxpayer will need to make payment of £1,400 on or before 31/01/2003 to settle the 2001-2002 BCD.