SAM2001 – Amend payment: amend payments on account: introduction

Calculation of initial payments on account

The payments on account due by SA taxpayers for 1996/97, the first SA year, are calculated from the total liability for 1995/96 on

• Schedule A or D assessments
• Direct Collection assessments

The majority of payments on account for the year 1996/97 were calculated and recorded on the SA system during the automatic conversion process. A small number of 1996/97 payments on account were created manually by an operator in the office with processing responsibility using on-line function AMEND PAYMENTS ON ACCOUNT.

There are special rules for calculating payments on account for 1996/97 ( SAM1100). These rules were applied in the majority of cases during the automatic conversion process. The rules are to be applied when payments on account are amended or created manually.

Change in the 1995/96 amount collectible

There will be occasions after the automatic or manual creation of payments on account, when

• The amount of tax and / or NIC payable for 1995/96 is amended
• An amount of tax and / or NIC for 1995/96 is held over or the amount held over changes
• A new 1995/96 assessment is raised creating a new liability

Any changed or new amount collectible for 1995/96 potentially affects the payments on account due in SA for the year 1996/97.

Amending payments on account

Where the amount collectible changes or a new liability arises for 1995/96, the 1996/97 payments on account position needs to be reviewed and, if necessary, a liability amended or created. Any new or amended payments on account are calculated in accordance with the rules for calculating payments on account.

The office with processing responsibility uses function AMEND PAYMENTS ON ACCOUNT to update the SA taxpayer record where 1996/97 payments on account need to be amended or created. The consequences of amending payments on account ( SAM1120) depend on the state of the taxpayer record.

You may receive claims to reduce payments on account where the reason given is that the payments on account are incorrectly calculated. If the taxpayer is correct in requesting a reduction, the request is not to be treated as a claim and function AMEND PAYMENTS ON ACCOUNT is to be used to change the payments on account.

In some cases where payments on account are set up for the first time, the interest position needs to be considered. For more information see subject ‘Payments on account, due dates and interest’ ( SAM2030).

Notification of new or amended payments on account

New or amended payments on account (PoA) are normally notified manually to the taxpayer and, where a form 64-8 has been received, to the agent. For more information see subjects

• ‘Notify taxpayer of new or amended PoA’ ( SAM2050), and
• ‘Notify agent of new or amended PoA’ ( SAM2060)

The new or amended PoA will be shown on the next taxpayer statement.

Notes:

1. Function AMEND PAYMENTS ON ACCOUNT is not to be used when a claim to adjust payments on account is received from a taxpayer or agent. For more information see section ‘Claim to Adjust Payments on Account’ ( SAM1000 onwards)
   
   
2. The word ‘interims’ is sometimes used to describe the payments on account