SAM1040 - Amend payment: claim to adjust payments on account: validity of claim to adjust payments on account
General
Reason for reduction
Claim to carry-back relief
Valid claim received
Invalid claim received
General
There are no restrictions on the number of claims to adjust payments on account a taxpayer or agent can make. There is, however, a time limit and this is explained below.
Where a claim is received it is only to be processed if it is valid - see subject ‘Processing a Claim to Adjust PoA’ (SAM1050). A claim is valid if it
- Is in writing, including by fax, or made using SA Online
- Gives a reason for reduction
- Is signed by the taxpayer or agent
- Is received before the 31 January following the end of the tax year
- Shows an acceptable year
- States what the adjusted payments on account are or provides sufficient information to deduce the amounts - see ‘Rules for adjusting payments on account’ (SAM1110)
Reason for reduction
A reason for requesting a reduction in the payments on account must be given. The reason should explain why the taxpayer believes that reduced payments on account are payable.
A request without a reason is not a valid claim and is returned to the taxpayer with an explanation.
Where the reason is unsatisfactory, for example where the taxpayer says ‘I am unable to pay’, a valid claim has not been made. The request to reduce payments on account is, likewise, returned to the taxpayer with an explanation.
In both cases the request is turned down because it does not constitute a claim as set out in the legislation.
Notes:
| 1. | Where a taxpayer says payments on account have been set up in the wrong amounts, the claim is to be dealt with by the taxpayer’s office responsible for processing. The office responsible for processing is to consider amending the payments on account. |
| 2. | Where the reason is that a foreign national making a claim is covered by Tax equalisation arrangements (Regulation 102 case) the claim is to be sent to the taxpayer’s office responsible for processing |
| 3. | Where the reason is unsatisfactory, there is no question of a claim being disputed because a claim, as described in the legislation, has not been made. |
| 4. | Penalties may be charged where fraudulent or negligent claims are made. |
Claim to carry-back relief
Where the reason given for a claim is that the taxpayer expects to apply or has applied for carry-back relief the claim cannot be rejected. Remember the legislation does not stipulate that the reason for the claim has to be valid. Although carry-back relief does not alter the self assessment for this or the earlier year and has no effect on the level of the payments on account for this year the claim should be processed.
Valid claim received
You should issue form SA 614 (available on SEES in Forms and Letters) in all cases where a valid claim has been made in writing, except where the claim has been made on a return. The form should be sent direct to the taxpayer, regardless of whether or not any agent is acting. The SA614 warns the taxpayer that we have not agreed their figures and they will be charged interest if the unpaid payments on account are in any part due. A form SA614A, also available on SEES, should be issued to any agent acting, even if the taxpayer personally made the claim.
Where a valid claim has been made online, the payments on account will be adjusted automatically and function SA NOTES automatically updated to record that the adjustment has been made.
Invalid claim received
If a request to adjust payments on account has been received in writing and is invalid, you should write to the taxpayer giving an explanation of why the claim cannot be accepted. If a claim has been made online and is invalid, it will be automatically rejected and function SA NOTES automatically updated to record details of the claim and the reason for rejection.
Where a request to reduce payments on account is turned down, there is no question of a claim being disputed because a claim, as described in the legislation, has not been made. When writing to turn down an invalid request
- Explain to the taxpayer or agent why the request to adjust payments on account is invalid and not acceptable as a claim
- Invite the taxpayer or agent to make a claim if there is satisfactory reason
- Explain that a reason which supports a belief that reduced payments on account are payable must be given on the claim form
- Send the taxpayer or agent a claim form SA303 and a return envelope
Note: Penalties may be charged if fraudulent or negligent claims are made.
Any payslip showing nil or nothing due is returned to the taxpayer with a letter explaining how to make a claim. A part payment is not treated as a request to reduce payments on account if there is no indication that reduced payments may be due.
