A Self Assessment taxpayer is required to file a tax return by a certain date. When that requirement is not met, HM Revenue & Customs (HMRC) has the power to raise a Revenue Determination of the estimated liability due and unpaid. Although the determination is an estimate, it must be made ‘to the best…information and belief’ of the HMRC officer making the determination.
Tax return filing dates and penalties are covered in this post https://abbeytaxblog.co.uk/2013/12/03/tax-return-filing-dates-and-penalties-day-3-of-25-days-of-tax-tips/
HMRC will not usually raise a determination as soon as a tax return is late, but will wait to see if the late filing penalties act as a sufficient prompt to encourage the submission of the outstanding return.
However, if the return is still outstanding after 6 months of the filing date and three separate late filing penalties have been levied, HMRC will consider raising a determination before the 12 month late filing penalty becomes due.
The Debt Management and Banking team within HMRC is responsible for raising determinations and will only do so if, within the last 6 months, the taxpayer has been given a written or verbal warning about a determination for the relevant year.
Time limit for raising a Revenue Determination
Up to and including 31 March 2010 determinations could be raised within 5 years from the filing date.
From 1 April 2010 determinations are raised within 3 years from the filing date of the return.
There is no right of appeal against a determination and no postponement of the tax charged.
The determination stands as if it were a self assessment until it is displaced by the filing of the relevant outstanding return.
Time limit for displacing the determination
The relevant outstanding return has to be filed by the later of
- 3 years from the filing date, and
- 12 months from the date of the determination
in order to displace the determination.
From 1 April 2011, a taxpayer who is out of time to file an outstanding tax return, in order to displace a determination. is left with pursuing a claim to special relief.
Once a determination has been raised, HMRC will allow 30 days for the outstanding return to be filed, before considering any enforcement action to pursue any tax debt arising from the determination.
Author: Guy Smith, Senior Tax Consultant on the ReSource Tax and VAT Consultancy Team.
- Tax Return filing dates and penalties – Day 3 of 25 days of tax tips (abbeytaxblog.co.uk)
- Interest and penalties charged by HMRC for paying tax late – Day 6 of 25 days of tax tips (abbeytaxblog.co.uk)
- Reduced payments on account to HMRC – Day 5 of 25 days of tax tips (abbeytaxblog.co.uk)
- Payments on account: dates due and calculations – Day 4 of 25 days of tax tips (abbeytaxblog.co.uk)