SDLTM81860 - Compliance: Working an enquiry

Payments on account: Introduction

Where it has been established that the tax assessed is insufficient but enquiries are not yet completed, a payment on account should normally be requested.

It is important to request payments on account in any case where additional liability is likely to be material, unless it is a case of serious fraud. See SDLTM81880.

Such payments

• indicate to the purchaser the seriousness of the enquiry. Making payments has an immediate and tangible impact: the enquiry is no longer about a payment which may be made in the future
• reduce the eventual net liability for the purchaser because interest ceases to accrue. It is only fair that this should be pointed out and be taken into account when considering the abatement for co-operation
• ensures that HM Revenue & Customs receives payment. It is preferable to obtain money as the case progresses rather than having to negotiate a final settlement for tax, interest and penalties with a purchaser who has insufficient funds at that time
• are a further indication to the purchaser and their agent that the compliance caseworker is in control of the case and has their eyes firmly fixed on a proper settlement

The total payments on account should be reviewed from time to time, and should not normally exceed the potential liability to tax.