SAM20120 – Assessments: assessments within SA: SA assessments - examples

The following examples illustrate

• Relevant dates for S86 interest, in respect of

And

• What entries to make in Function CREATE REVENUE ASSESSMENT
• The effects of a Revenue assessment on the following year’s payments on account
• The effects an appeal and postponement application have on the liability for the year of assessment and the following year’s payments on account

Select the example you want to view

Example 1 - A discovery assessment is made for one year only

Example 1A - An appeal and postponement application is received in respect of the discovery assessment

Example 2 - Discovery assessments are made for consecutive years

Example 2A - Appeals and postponement applications are received in respect of the discovery assessments

Example 3 - A non-discovery assessment is made

Example 1

A discovery assessment is made for one year only

The liability arising from the 2001-02 self assessment is £4,000, made up of two payments on account of £1500 and a balancing charge of £1000.

A discovery assessment is made on 15 April 2004 for the year 2001-02.

The additional liability arising from the assessment is £5,000.

2001-02

Source	Amount Due	S86 rel. date	Amount
Discovery assessment	5,000	31/01/2003 (BAL)	5,000

Entries to make in Function CREATE REVENUE ASSESSMENT

Field	Entry	Notes
Year	02
Total	5000
First POA
Second POA
Balance	5000	CY assessment charge

In addition, you must consider the effect of the discovery assessment on the 2002-03 payments on account, which should be adjusted to reflect the revised 2001-02 liability.

2002-03

Source	Amount Due	S86 rel. date	Amount
Payt on A/C (Self assessment)	4,000	31/01/2003 (PoA1) 31/07/2003 (PoA2)	2,000 2,000
Payt on A/C (Discovery assessment)	5,000	31/01/2003 (PoA1) 31/07/2003 (PoA2)	2,500 2,500

Example 1A

An appeal and postponement application is received in respect of the discoveryassessment made in Example 1

The taxpayer applies for £3,000 of the charge arising from the 2001-02 assessment to be formally stoodover

The revised amounts due will be

2001-02

Source	Amount Due	S86 rel. date	Amount
Discovery assessment	2,000 (5,000 - 3,000)	31/01/2003 (BAL)	2,000

You must consider the 2002-03 payments on account and informally standover the amount resulting from the previous year’s Revenue assessment for which postponement was sought for 2001-02.

2002-03

Source	Amount Due	S86 rel. date	Amount
Payt on A/C (Self assessment)	4,000	31/01/2003 (PoA1) 31/07/2003 (PoA2)	2,000 2,000
Payt on A/C (Discovery assessment)	2,000 (5,000 - 3,000)	31/01/2003 (PoA1) 31/07/2003 (PoA2)	1,000 1,000

Example 2

Discovery assessments are made for consecutive years

The liability arising from the taxpayer’s self assessment is

2001-02 £6,000

2002-03 £8,000

Discovery assessments are made for the years 2001-02 and 2002-03. The additional liability arising from the assessments is

2001-02 £5,000

2002-03 £7,000

2001-02

Source	Amount Due	S86 rel. date	Amount
Discovery assessment	5,000	31/01/2003 (BAL)	5,000

Entries to make in Function CREATE REVENUE ASSESSMENT

Field	Entry	Notes
Year	02
Total	5000
First POA
Second POA
Balance	5000	CY assessment charge

2002-03

Source	Amount Due	S86 rel. date	Amount
Self assessment	8,000	31/01/2003 (PoA1) 31/07/2003 (PoA2) 31/01/2004 (BAL)	3,000 3,000 2,000
Discovery assessment	7,000	31/01/2003 (PoA1) 31/07/2003 (PoA2) 31/01/2004 (BAL)	2,500 2,500 2,000

Entries to make in Function CREATE REVENUE ASSESSMENT

Field	Entry	Notes
Year	03
Total	7000
First POA	2500	1/2 PY asst charge
Second POA	2500	1/2 PY asst charge
Balance	2000	CY asst charge less POA

In addition, you must consider the effect of the 2002-03 Revenue assessment on the 2003-04 payments on account, which should be adjusted to reflect the revised 2002-03 liability.

2003-04

Source	Amount Due	S86 rel. date	Amount
Payt on A/C (Self assessment)	8,000	31/01/2004 (PoA1) 31/07/2004 (PoA2)	4,000 4,000
Payt on A/C (Revenue assessment)	7,000	31/01/2004 (PoA1) 31/07/2004 (PoA2)	3,500 3,500

Example 2A

Appeals and postponement applications are received in respect of the Revenueassessments made in example 2

The taxpayer applies for £3,000 of the charges arising from the 2001-02 and 2002-03 Revenue assessments to be formally stoodover.

The revised amounts due will be

2001-02

Source	Amount Due	S86 rel. date	Amount
Revenue assessment	2,000 (5,000 - 3,000)	31/01/2003 (BAL)	2,000

2002-03

Source	Amount Due	S86 rel. date	Amount
Self assessment	8,000	31/01/2003 (PoA1) 31/07/2003 (PoA2) 31/01/2004 (BAL)	3,000 3,000 2,000
Revenue assessment	4,000 (7,000 - 3,000)	31/01/2003 (PoA1) 31/07/2003 (PoA2) 31/01/2004 (BAL)	1,000 1,000 2,000

In addition, you must consider the 2003-04 payments on account and informally standover the amount resulting from the previous year’s Revenue assessment for which postponement was sought for 2002-03.

2003-04

Source	Amount Due	S86 rel. date	Amount
Payt on A/C (Self assessment)	8,000	31/01/2004 (PoA1) 31/07/2004 (PoA2)	4,000 4,000
Payt on A/C (Revenue assessment)	4,000 (7,000 - 3,000)	31/01/2004 (PoA1) 31/07/2004 (PoA2)	2,000 2,000

Example 3

A non-discovery assessment is required

An assessment is made on 15 April 2003 for the year 2001-02. The liability arising is £5,000.

2001-02

Source	Liability	S86 rel. date	Amount
Revenue assessment	5,000	15/05/2003	5,000

Entries to make in Function CREATE REVENUE ASSESSMENT

Field	Entry	Notes
Year	02
Total	5000
First POA
Second POA
Balance	5000	CY assessment charge

Notes:

1. The relevant date for S86 interest purposes is 30 days after the date of issue of the Notice of Assessment. (This will differ if the assessment is made under either S30 TMA 1970 or S153A(4) TCGA 1992)
   
   
2. Use function AMEND RELEVANT DATES to amend the due date of payment on the additional charge to 30 days after the issue of the assessment
   
   
3. Payments on account for the year following the year of assessment are not disturbed

If an appeal and application for postponement is subsequently received, amendment is due only in respect of the charge resulting from the assessment. There are no other consequences.