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Contact: michael.firth@taxbar.com
Procedure.Tax
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D1: Payment and repayment of income tax, CGT and SDLT
Payment and repayment of income tax and CGT shown in return
"(1) Subject to subsection (2) below, the difference between—
(a) the amount of income tax and capital gains tax contained in a person's self-assessment under section 9 of this Act for any year of assessment, and
(b) the aggregate of any payments on account made by him in respect of that year (whether under section 59A of this Act or under Schedule 2 to the Finance Act 2019 or otherwise) and any income tax which in respect of that year has been deducted at source,
shall be payable by him or (as the case may be) repayable to him as mentioned in subsection (3) or (4) below but nothing in this subsection shall require the repayment of any income tax treated as deducted or paid by virtue of section 246D(1) of the principal Act, section 626 of ITEPA 2003 or section 399(2) or 530(1) of ITTOIA 2005." (TMA 1970, s.59B(1))
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"(5A) Where a determination under section 28C of this Act which has effect as a person's self-assessment is superseded by his self-assessment under section 9 of this Act, any amount of tax which is payable or repayable by virtue of the supersession shall be payable or (as the case may be) repayable on or before the day given by subsection (3) or (4) above." (TMA 1970, s.59B(5A))
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Meaning of tax deducted at source
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"(7) In this section any reference to income tax deducted at source is a reference to income tax deducted or treated as deducted from any income or treated as paid on any income.
But such a reference does not include income tax repaid on a claim for repayment of income tax which—
(a) is treated as having been paid by virtue of section 520(4) of ITA 2007 (gift aid relief: income tax treated as paid by trustees of charitable trust), or
(b) has been deducted at source from income to which section 532, 533, 536 or 537 of that Act (certain sources of income exempt from income tax) applies." (TMA 1970, s.59B(7))
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Adjust for PAYE deducted at source in relation to a different year
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"(2) The following, namely—
(a) any amount which, in the year of assessment, is deducted at source under PAYE regulations in respect of a previous year, and
(b) any amount which, in respect of the year of assessment, is to be deducted at source under PAYE regulations in a subsequent year,
shall be respectively deducted from and added to the aggregate mentioned in subsection (1)(b) above." (TMA 1970, s.59B(2))
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Date of payment: 31 January of following tax year unless late notice requiring return given
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"(3) In a case where the person—
(a) gave the notice required by section 7 of this Act within six months from the end of the year of assessment, but
(b) was not given notice under section 8 or 8A of this Act until after the 31st October next following that year,
the difference shall be payable or repayable at the end of the period of three months beginning with the day on which the notice under section 8 or 8A was given.
(4) In any other case, the difference shall be payable or repayable on or before the 31st January next following the year of assessment." (TMA 1970 s.59B(3) - (4))
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Notice of liability given after withdrawal by HMRC of notice requiring return
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"(4ZA) In a case in which the notice required by section 7 was given following the receipt of a notice under section 8B, subsections (3) and (4) apply as if—
(a) the reference to the notice required by section 7 were a reference to the original notice required by that section, and
(b) the references to notice under section 8 or 8A were references to the original notice under that section.
(4ZB) In subsection (4ZA) the references to original notices are to notices given before the notice under section 8B." (TMA 1970, s.59B(4ZA) - (4ZB))
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Time of payment
Cheque: date of receipt if honoured
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"(1) For the purposes of this Act and the provisions mentioned in subsection (2) below, where—
(a) any payment to an officer of the Board or the Board is made by cheque,
(b) the cheque is paid on its first presentation to the banker on whom it is drawn; and
(c) section 102 of the Finance Act 2009 (repayment interest).
the payment shall be treated as made on the day on which the cheque was received by the officer or the Board.
(2) The provisions are—
(a) sections 824 to 826 of the principal Act (repayment supplements and interest on tax overpaid); and
(b) section 283 of the 1992 Act (repayment supplements).
(3) This section is subject to regulations under section 95(1) of the Finance Act 2007 (payment by cheque)." (s.70A)
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Right to repayment delayed if return is enquired into
"(4A) Where in the case of a repayment the return on the basis of which the person's self-assessment was made under section 9 of this Act is enquired into by an officer of the Board—
(a) nothing in subsection (3) or (4) above shall require the repayment to be made before the day on which, by virtue of section 28A(1B) of this Act, the enquiry is completed; but
(b) the officer may at any time before that day make the repayment, on a provisional basis, to such extent as he thinks fit." (s.59B(4A))
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Payment and repayment due as a result of amendment or correction
"(5) An amount of tax which is payable or repayable as a result of the amendment or correction of a self-assessment under—
(a) section 9ZA, 9ZB, 9C or 28A of this Act (amendment or correction of return under section 8 or 8A of this Act), or
(b) section 12ABZB(8), 12ABA(3)(a), 12ABB(6)(a), 28B(4)(a), 30B(2)(a), 33A(4)(a) or 50(9)(a) of this Act (amendment of partner's return to give effect to amendment or correction of partnership return),
is payable (or repayable) on or before the day specified by the relevant provision of Schedule 3ZA to this Act." (s.59B(5))
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General rule: apply s.59B(3) and (4) unless specific rule provides later time
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"(2) If in any case the general rules in section 59B(3) and (4) of this Act give a later day, those rules apply instead." (TMA 1970 Sch 3ZA, para 1(2))
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Amendment by closure notice: 30 days after notice of amendment
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"(1) This paragraph applies where an amount of tax or an amount on account of capital gains tax is payable or repayable as a result of the amendment of a self-assessment under section 28A of this Act (amendment of …2 return by closure notice following enquiry).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the closure notice was given." (TMA 1970 Sch 3ZA, para 5)
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Amendment of return by taxpayer: 30 days after notice of amendment
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"(1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 9ZA of this Act (amendment of personal or trustee return by taxpayer).
(2) Subject to sub-paragraph (3) below, the amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice of amendment was given." (TMA 1970 Sch 3ZA, para 2(1) - (2))
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Amendment during enquiry: deferral until enquiry closed
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"(3) If section 9B(3) of this Act applies (amendment of self-assessment by taxpayer during enquiry: deferral of effect), then—
(a) if the amendment is taken into account as mentioned in paragraph (a)(i) of that subsection, paragraph 5 below (amendment of personal or trustee return by closure notice) applies accordingly; and
(b) if the amendment takes effect under paragraph (b) of that subsection on the issue of a partial or final closure notice, the amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the relevant day.
(4) In sub-paragraph (3)(b), “the relevant day” means—
(a) in the case of an amount of tax that is payable, the day on which the partial or final closure notice was given;
(b) in the case of an amount of tax that is repayable—
(i) if the closure notice was a final closure notice, the day on which that notice was given, and
(ii) if the closure notice was a partial closure notice, the day on which the final closure notice relating to the enquiry was given." (TMA 1970 Sch 3ZA, para 2(3) - (4))
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Correction of return by HMRC: 30 days after notice of correction
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"(1) This paragraph applies where an amount of tax is payable or repayable as a result of the correction of a self-assessment under section 9ZB of this Act (correction of personal or trustee return by the Revenue).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice of correction was given." (TMA 1970 Sch 3ZA, para 3)
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Jeopardy amendment: 30 days after notice of amendment
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"(1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 9C of this Act (amendment of personal or trustee return by Revenue to prevent loss of tax).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice of amendment was given." (TMA 1970 Sch 3ZA, para 4)
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Amendment consequential on a amendment or correction of partnership tax return: 30 days after notice
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"[7] (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 12ABA(3)(a) of this Act (consequential amendment of partner's personal or trustee return where partnership return amended by taxpayer).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 12ABA(3)(a) of this Act was given.
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[8] (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 12ABZB(8)(a) of this Act (consequential amendment of partner's personal or trustee return where partnership return corrected following reference to tribunal) or section 12ABB(6)(a) of this Act (consequential amendment of partner's personal or trustee return where partnership return corrected by Revenue).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 12ABZB(8)(a) or 12ABB(6)(a) of this Act was given.
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[9] (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 28B(4)(a) of this Act (consequential amendment of partner's personal or trustee return where partnership return amended by closure notice).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 28B(4)(a) of this Act was given.
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[10] (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 30B(2)(a) of this Act (consequential amendment of partner's personal or trustee return where partnership return amended by Revenue to prevent loss of tax).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 30B(2)(a) of this Act was given.
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[11] (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 50(9)(a) of this Act (consequential amendment of partner's personal or trustee return where partnership statement amended by Revenue following decision on appeal).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 50(9)(a) of this Act was given." (TMA 1970 Sch 3ZA, paras 7 - 11)
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Payment of tax due as a result of simple assessment
"(1) This section applies where a person has been given a simple assessment in relation to a year of assessment.
(2) Subject to subsection (3), the difference between—
(a) the amount of income tax and capital gains tax for that year contained in the simple assessment, and
(b) the aggregate of any payments on account made by the person in respect of that year (whether under section 59A of this Act or under Schedule 2 to the Finance Act 2019 or otherwise) and any income tax which in respect of that year has been deducted at source,
is payable by that person as mentioned in subsection (4) or (5).
(3) Nothing in subsection (2) is to be read as requiring the repayment of any income tax which any provision of the Income Tax Acts provides is not repayable.
(4) In a case where the person is given notice of the simple assessment after the 31st October next after the year of assessment, the difference is payable at the end of the period of 3 months after the day on which that notice was given.
(5) In any other case the difference is payable on or before the 31st January next after the end of the year of assessment.
(6) Section 59B(7) (which explains references to income tax deducted at source) applies for the purposes of this section." (TMA 1970, s.59BA)
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Payment of tax due as a result of other assessment
"(6) Any amount of income tax or capital gains tax which is payable by virtue of an assessment made otherwise than under section 9, 28H or 28I of this Act shall, unless otherwise provided, be payable on the day following the end of the period of 30 days beginning with the day on which the notice of assessment is given." (s.59B(6))
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Payments on account of income tax
"(1) Subject to subsection (9) below, this section applies to any person (the taxpayer) as regards a year of assessment if as regards the immediately preceding year—
(a) he is assessed to income tax under section 9 of this Act in any amount, and
(b) that amount (the assessed amount) exceeds the amount of any income tax which has been deducted at source, and
(c) the amount of the excess (the relevant amount) is not less than such amount as may be prescribed by regulations made by the Board, and
(d) the proportion which the relevant amount bears to the assessed amount is not less than such proportion as may be so prescribed.
(2) Subject to subsection (3) below, the taxpayer shall make two payments on account of his liability to income tax for the year of assessment—
(a) the first on or before the 31st January in that year, and
(b) the second on or before the next following 31st July;
and, subject to subsections (4) to (4B) below, each of those payments on account shall be of an amount equal to 50 per cent of the relevant amount." (TMA 1970, s.59A(1) - (2))
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Meaning of income tax deducted at source
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"(8) In this section, in relation to a year of assessment, any reference to the amount of any income tax deducted at source is a reference to the amount by which the aggregate of the following, namely—
(a) any income tax deducted or treated as deducted from any income, or treated as paid on any income, in respect of the year, and
(b) any amounts which, in respect of the year, are to be deducted at source under PAYE regulations in subsequent years,
exceeds the aggregate of any amounts which, in the year, are deducted at source under PAYE regulations in respect of previous years." (TMA 1970, s.59A(8))
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PAYE adjustments
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"(10) PAYE regulations may provide that, for the purpose of determining the amount of any such excess as is mentioned in subsection (1) above, any necessary adjustments in respect of matters prescribed by the regulations shall be made to the amount of tax deducted at source under PAYE regulations" (TMA 1970, s.59A(10))
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Late self-assessment for previous year: amount treated as always due
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"(4A) If as regards the year immediately preceding the year of assessment—
(a) the taxpayer is assessed to income tax under section 9 of this Act after the date on or before which either payment on account is required to be made, or
(b) his assessment to income tax under that section is amended after that date,
then, subject to subsections (3) and (4) above and subsection (4B) below and to any subsequent application of this subsection, the amount of the payment on account shall be, and shall be deemed always to have been, equal to 50 per cent of the relevant amount as determined on the basis of the assessment or, as the case may be, the assessment as amended." (TMA 1970, s.59A(4A))
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Self-assessment amended: increased amount treated as always due
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"(4A) If as regards the year immediately preceding the year of assessment—
(a) the taxpayer is assessed to income tax under section 9 of this Act after the date on or before which either payment on account is required to be made, or
(b) his assessment to income tax under that section is amended after that date,
then, subject to subsections (3) and (4) above and subsection (4B) below and to any subsequent application of this subsection, the amount of the payment on account shall be, and shall be deemed always to have been, equal to 50 per cent of the relevant amount as determined on the basis of the assessment or, as the case may be, the assessment as amended." (TMA 1970, s.59A(4A))
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Discovery assessment raised: increased amount treated as always due
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"(4B) If as regards the year immediately preceding the year of assessment the taxpayer is assessed to income tax under section 29 of this Act in any amount, then, subject to subsections (3) and (4) above and to any subsequent application of this subsection, the amount of each payment on account shall be, and shall be deemed always to have been, the total of—
(a) the amount which, immediately before the making of the assessment under section 29, is the amount of that payment, and
(b) an amount equal to 50 per cent of the amount in which he is assessed under that assessment;
and if that assessment is varied, the amount in which he is assessed under it shall be taken for the purposes of paragraph (b) above to be the amount of the assessment as varied." (TMA 1970, s.59A(4B))
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Payments on account recoverable as tax
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"The provisions of the Taxes Acts as to the recovery of tax shall apply to an amount falling to be paid on account of tax in the same manner as they apply to an amount of tax." (TMA 1970, s.59AB)
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Claim to reduce or extinguish payments on account
No additional liability to income tax expected
"(3) If, at any time before the 31st January next following the year of assessment, the taxpayer makes a claim under this subsection stating—
(a) his belief that he will not be assessed to income tax for that year, or that the amount in which he will be so assessed will not exceed the amount of income tax deducted at source, and
(b) his grounds for that belief,
each of the payments on account shall not be, and shall be deemed never to have been, required to be made." (TMA 1970, s.59A(3))
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Reduced liability to income tax expected
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"(4) If, at any time before the 31st January next following the year of assessment, the taxpayer makes a claim under this subsection stating—
(a) his belief that the amount in which he will be assessed to income tax for that year will exceed the amount of income tax deducted at source by a stated amount which is less than the relevant amount, and
(b) his grounds for that belief,
the amount of each of the payments on account required to be made shall be, and shall be deemed always to have been, equal to 50 per cent of the stated amount." (TMA 1970, s.59A(4))
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Effect to be given to claim
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"(5) Where the taxpayer makes a claim under subsection (3) or (4) above or subsection (4A) or (4B) above applies, there shall be made all such adjustments, whether by the repayment of amounts paid on account, by the making of payments or further payments on account or otherwise, as may be required to give effect to the provisions of that subsection." (TMA 1970, s.59A(5))
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Penalty for negligent or fraudulent claim
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"(6) Where the taxpayer fraudulently or negligently makes any incorrect statement in connection with a claim under subsection (3) or (4) above, he shall be liable to a penalty not exceeding the difference between—
(a) the amount which would have been payable on account if he had made a correct statement, and
(b) the amount of the payment on account (if any) made by him." (TMA 1970, s.59A(6))
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Direction that no payments on account required
"(9) If, at any time before the 31st January next following a year of assessment, an officer of the Board so directs—
(a) this section shall not apply, and shall be deemed never to have applied, as regards that year to any person specified in the direction; and
(b) there shall be made all such adjustments, whether by the repayment of amounts paid on account or otherwise, as may be required to give effect to the direction." (TMA 1970, s.59A(6))
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Payments on account of capital gains tax (certain disposals of land)
Disposal of land by non-resident or disposal of residential property
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"(1) This paragraph applies if—
(a) a person is required to make a return under this Schedule in respect of any disposal, and
(b) as at the filing date for the return, an amount of capital gains tax is notionally chargeable on the person (as determined in accordance with paragraph 7).
(2) The person is liable to pay that amount on account of the person's liability to capital gains tax for the tax year concerned so far as that amount has not already become payable as a result of any previous return under this Schedule in respect of a disposal in that period.
(3) The amount is payable on the filing date for the return." (FA 2019, Sch 2, para 6)
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Persons require to make a return
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See B4: Other returns
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Filing date for the return: 30 days after completion
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"...must deliver the return to an officer of Revenue and Customs on or before the 30th day following the day of the completion of the disposal." (para 3(1))
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"In this Part of this Schedule the “completion” of a disposal is regarded as occurring—
(a) at the time of the disposal, or
(b) if the disposal is under a contract which is completed by a conveyance, transfer or other instrument later than the time of the disposal, at the time when the instrument takes effect." (para 17(2))
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Calculation of amount of CGT notionally chargeable
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"(1) This paragraph applies for determining the amount of capital gains tax (if any) which is notionally chargeable on a person as at the filing date for a return.
(2) The amount of capital gains tax notionally chargeable on the person as at that date is the amount of that tax for which the person would be liable for the tax year concerned, ignoring, for this purpose, the following disposals—
(a) disposals which have a completion date later than the completion date of the disposal in respect of which the return is made (but see sub-paragraph (3)), and
(b) disposals on which gains accrue but which are not disposals to which this Schedule applies.
(3) A disposal on which a loss accrues is not to be ignored under sub-paragraph (2)(a) if the time at which the disposal is made (as determined under section 28 of TCGA 1992) falls on or before the completion date of the disposal in respect of which the return is made.
(4) For provision relevant to the operation of this paragraph, see paragraphs 14 and 15 (making of assumptions, reasonable estimates etc)." (para 7)
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Repayment of amounts previously paid on account
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"(1) This paragraph applies if—
(a) a person makes and delivers a return under this Schedule in respect of a disposal,
(b) the person has previously paid amounts on account of the person's liability to capital gains tax for the tax year concerned, and
(c) the amounts exceed the amount of capital gains tax notionally chargeable on the person as at the filing date for the return.
(2) The excess is repayable to the person on the filing date for the return.
(3) In determining the total amount of payments that have, at any time, been made on account of a person's liability to capital gains tax for a tax year, account must be taken of amounts already repaid under this paragraph." (para 8)
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Return to claim loss
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"(1) If—
(a) a person makes a disposal on which an allowable loss accrues, and
(b) had a gain accrued instead, the disposal would have been one to which this Schedule applies as a result of paragraph 1(1)(b),
the person may make and deliver a return under this Schedule in respect of the disposal for the purpose of securing the application of paragraph 8.
(2) Accordingly, the disposal is treated for that purpose as if it were a disposal to which this Schedule applies.
(3) This paragraph does not apply in respect of a disposal if the filing date for the return which the person would otherwise be entitled to make and deliver falls on or after the date mentioned in paragraph 5(1)(a) or (b)." (para 9)
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SDLT
- Pay by filing date
"(1) Tax payable in respect of a land transaction must be paid not later than the filing date for the land transaction return relating to the transaction.
(2) Tax payable as a result of the withdrawal of relief under—
(za) any of paragraphs 5G to 5L of Schedule 4A (higher rate for certain transactions),
(zb) Part 3 of Schedule 6C (relief for freeport tax sites), other than in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies,
(a) Part 1 of Schedule 7 (group relief),
(b) Part 2 of that Schedule (reconstruction or acquisition relief),
(ba) Part 1 of Schedule 7A (PAIF seeding relief),
(bb) Part 2 of Schedule 7A (COACS seeding relief), or
(c) Schedule 8 (charities relief),
must be paid not later than the filing date for the return relating to the withdrawal (see section 81).
(2A) Tax payable as a result of a withdrawal of relief under any of paragraphs 6D, 6F, 6G[, 6H and 6I]6 of Schedule 4A (higher rate: alternative finance arrangements) or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies must be paid not later than the filing date for the return relating to the withdrawal (see section 81ZA(1)).
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(5A) The above provisions are also subject to paragraph 7 of Schedule 61 to the Finance Act 2009 (payment of tax where land ceases to qualify for relief in respect of alternative finance investment bonds)." (FA 2003, s.86)
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- Amended return: pay immediately (unless filing date not reached)
"(3) Tax payable as a result of the amendment of a return must be paid forthwith or, if the amendment is made before the filing date for the return, not later than that date." (FA 2003, s.86)
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- Tax due as a result of assessment or determination: 30 days
"(4) Tax payable in accordance with a determination or assessment by the Inland Revenue must be paid within 30 days after the determination or assessment is issued."
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"(5) The above provisions are subject to—
[...]
(b) paragraphs 39 and 40 of Schedule 10 (postponement of payment pending determination of appeal)." (FA 2003, s.86)
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- Application to defer: contingent or uncertain consideration other than rent
"(1) The purchaser may apply to the Inland Revenue to defer payment of tax in a case where the amount payable depends on the amount or value of chargeable consideration that—
(a) at the effective date of the transaction is contingent or uncertain, and
(b) falls to be paid or provided on one or more future dates of which at least one falls, or may fall, more than six months after the effective date of the transaction.
[...]
(5) An application under this section does not affect the purchaser's obligations as regards payment of tax in respect of chargeable consideration that has already been paid or provided or is not contingent and whose amount is ascertained or ascertainable at the time the application is made.
This applies as regards both the time of payment and the calculation of the amount payable.
[...]
[(7) This section does not apply so far as the consideration consists of rent." (FA 2003, s.90)
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