EP6608 - Underpayments/Overpayments: ECS A19: Underpayments - treat each year separately

For the purposes of ESC A19 each year is discrete and independent of any other year. An underpayment that is given up under the terms of the concession should not be restricted by an overpayment from another year. Any such overpayment should be repaid, or set off against an underpayment to which ESC A19 does not apply.

Example

The three years 2001/02 - 2003/04 are all open.
After review the position is:

• 2001/02. Tax overpaid £100.

• 2002/03. Tax underpaid £400 -to be given up under ESC A19 and not carried forward to 2003/04.

• 2003/04 Tax underpaid £300 - ESC A19 does not apply.

The underpayment of £400 for 2002/03 is given up and recorded in the Establishment file (EP6624). The overpayment for 2001/02 is carried forward to 2003/04, reducing the recoverable tax to £200. If there had not been an underpayment in 2003/04 the tax overpaid of £100, plus any supplement, would be repaid to the taxpayer.