EP6617 - Underpayments/Overpayments: ESC A19: Exceptional Circumstances - Examples

Example 1

10 April 2004

Mr G tells us that he is no longer entitled to expenses allowance, but we fail to amend his code.

May 2004

Budget recoding

The Budget recoding was not an occasion when we could reasonably be expected to have spotted that the expenses allowance should not be in the code. It does not therefore count as a failure for ESC A19 purposes.

Example 2

March 2004

A taxpayer tells us that he will receive the state pension from 2nd April 2004.

Aug 2004

We receive the DWP notification of the pension.

October 2004

We code out a small private pension.

We fail on each occasion to include the state pension in the code.

May 2005

We make an informal calculation for 2004/05, including the state pension, and correct the code for 2005/06 to include all taxable income.

Although we failed more than once to deal with the information, the arrears are for one year only so the "exceptional circumstances" do not apply. As we corrected the failure less than 12 months after the year in which the information was received the underpayment at 5 April 2005 does not qualify for remission under ESC A19.

Example 3

As example 2 but, we did not amend the code for 2005/06 and allowed the failure to continue until May 2006. As a result there are underpayments for 2004/05 and 2005/06.

Subject to reasonable belief, the underpayment for 2004/05 & 2005/06 may be given up because we failed to act on information more than once about the same source of income and the arrears cover two whole tax years.