PAYE95030 - Reconcile individual: HMRC delay: ESC A19: underpayments - communication with the taxpayer

If you identify that ESC A19 may apply to an underpayment, take the following actions as submitting officer

• Open the ESC A19 stencil at PAYE95025 
• Complete page 1 ensuring that you fill in the appropriate boxes
• Include any additional information relating to the case
• Print and attach the ESC A19 stencil to any case papers
• Submit the stencil and case papers to your Authorising Officer

The Authorising Officer must 

• Review all the information submitted
• Complete page 2 of the stencil
• Provide a full explanation for decision to give up the arrears

Or

• Provide a full explanation for refusal to give up the arrears
• Request further information if there is insufficient information to make a decision

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Refusal to give up arrears

If the Authorising Officer decides that it is not appropriate to give up the underpayment, take the following actions

• Send the taxpayer a calculation of the underpayment for the year concerned if one has not already been sent
• The calculation should contain an explanation why the tax is due
• A letter warning the taxpayer that they will owe some tax should be issued if it is not possible to issue the calculation immediately
• If you speak to the taxpayer, make a note of the conversation as it may be useful in considering the taxpayers background in the event of any complaint at a later point

If the taxpayer requests that ESC A19 be considered, then you should send a response based on the reasons previously given in the ESC A19 stencil by the Authorising Officer, unless new information is provided. On no account should you respond providing your own explanation or opinion.

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Arrears given up

If the Authorising Officer confirms it is appropriate to write off an underpayment under ESC A19 after reviewing a case

• Send the taxpayer a calculation of the underpayment for the year concerned
• Confirm in writing that the underpayment is to be given up and provide the Authorising Officers explanation for the reason why

Please note however, that it will be rare to give up the arrears without first establishing the taxpayer’s background and the key factors for satisfying the reasonable belief test, see PAYE95080.