Section 6 - Payments & Repayments during Enquiries
Payments on account are payments that you make towards your tax bill. They are part of the bill but not the whole amount. Most people who are self-employed or a partner in a business partnership need to make these payments.
These payments on account are due
- on 31st January during the tax year (31/01/04 for the return for 2003/04)
- on 3ist July after the end of the tax year (31/07/04 for the return for 2003/04).
The payments on account are based on the tax due for the previous year. If we have found errors in your tax return as a result of our enquiries, you may need to increase your payments on account for the next year.
You may be able to reduce your payments on account if you have a reason to do so. Our enquiries may show that the amount you have self-assessed is too high, or circumstances have changed. For example, you may have been ill and not been able to work as much as you had hoped to. This is all right but if at the end of the enquiry you have to pay more tax for one year this may affect the amount you owe for future years too see Years before and after the enquiry. You should try not to reduce your payments on account too much because you will owe interest if you have underpaid.
Paying extra tax during an enquiry
In an enquiry we may also ask you to make a different payment on account. This is a payment before the end of the enquiry towards extra tax we think you owe us. If you agree that you do owe us more tax it is better to make a payment on account, even if the enquiry is not yet ended, so that interest isn't continuing to run on that amount.
Receiving Repayments during an Enquiry
If your statement shows you are entitled to a repayment and the enquiry into your tax return has not finished it is your decision to claim it or not. In some circumstances you may have already received the repayment.
It is your right to receive your repayment.
We advise you to think carefully about whether to ask for the repayment to be made. If you think the enquiry will mean you owe us more money then it may not be a good idea to ask for the repayment. This is because you may have to pay it back to us at the end of the enquiry.
If you have already received a repayment or you decide to claim an amount you are owed and at the end of the enquiry the officer tells you more tax is due you may have to repay all your repayment and, possibly more.
There might be occasions when you want to claim your repayment but the officer dealing with the enquiry does not want you to have it. We can withhold a repayment during an enquiry if we have a good reason. You can talk to the officer about this and he or she will tell you why.
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