SACM9015 - Consequential Claims after Assessment and Amendment: Non-Culpable Additions
Throughout this manual legislative references are to the Taxes Management Act 1970 (TMA70), unless otherwise stated.
Where you
- amend a return in an SA enquiry closure notice, or
- make a discovery assessment for reasons other than careless or deliberate behaviour
the taxpayer can make a relevant out-of-time claim, election, application or notice within one year from the end of the year of assessment in which the notice is issued. S43A and S43C(2).
In S43A for a claim, election, application or notice to be relevant to an amendment or assessment it must
- relate to the same year of assessment, or
- be made or given by reference to an event in that year, see S43A(3).
The taxpayer can also
- revoke a claim, election, application or notice already made, or
- amend a claim, election, application or notice, except where it is irrevocable in law.
The effect of the taxpayer making, revoking or amending a claim, election, application or notice is limited to the additional liability to tax resulting from the assessment or your amendment.
So if an ITSA enquiry increases a taxpayer’s self assessment by £1,500 tax, the effect of any out-of-time claims or elections is limited to £1,500, see S43B(3)). Any ‘excess’ tax effect of the claim or election ‘shall not be available to reduce any liability to tax’.
Specifically excluded from S43A by subsection 2A are
- elections as to transfer of married couple’s allowance, see ITA07/S47-49
- elections to transfer personal allowance to a spouse or civil partner, see ITA07/S55C
- elections for assets to be re-based to 1982, see TCGA92/S35.
Where the taxpayer’s action would alter the liability of another person, they will need the written consent of that other person, see S43B(1).