SELF-ASSESSMENT AND PAYMENT OF TAX (Ch 17)

By when must an individual notify HMRC of chargeability?

5 October following the end of the tax year (unless HMRC has already issued a notice to file).

What are the maximum penalties for failure to notify, and for errors in returns?

30% (careless/non-deliberate), 70% (deliberate), 100% (deliberate and concealed) of potential lost revenue (PLR). Same regime for CT and VAT returns.

What exempts an individual from notifying chargeability?

All of: no chargeable gains requiring tax, not liable to higher rate tax, and all income PAYE, taxed at source, or savings/dividend income within the nil rate bands.

What are the SA return filing deadlines?

Paper: 31 October following the end of the tax year. Electronic: 31 January following the end of the tax year.

What is the deadline when HMRC issues the notice to file late?

The later of the normal deadline and 3 months from the notice date (e.g. notice 14 December 2026, electronic = 13 March 2027).

By when must a paper return be filed for HMRC to calculate the tax?

31 October, or within 2 months of the notice if the notice was issued after 31 August.

What are the first two late-filing penalties?

£100 as soon as late (even if no tax is due). Then £10 per day for up to 90 days (£900), starting 3 months late.

What are the late-filing penalties at 6 and 12 months?

6 months: greater of 5% of unpaid tax and £300. 12 months: greater of a conduct-based % of unpaid tax and £300. All stages are cumulative.

What is the time limit for the taxpayer to amend an SA return?

12 months after the filing date (31 January Year 2 normally).

What is the time limit for HMRC to correct an SA return, and how long does the taxpayer have to object?

9 months after the day the return was actually filed. 30 days to object. Taxpayer’s 12 months run from the due date; HMRC’s 9 months from the actual filing date.

How long must records be kept?

In business (sole trader, partner, landlord): 5 years after 31 January following the tax year. Not in business: 1 year after. The 5 years applies to ALL records for the return.

What is the maximum penalty for failing to keep records?

£3,000 per tax year.

What are the payment on account dates and amounts?

31 January in the tax year and 31 July after it. Each is 50% of the previous year’s relevant amount.

What is the “relevant amount” for POAs?

Previous year’s income tax + Class 4 NIC payable under SA, excluding tax deducted at source (PAYE). CGT is not included.

When are POAs not required?

Relevant amount under £1,000, or more than 80% of the prior year’s liability met by deduction at source [check against BPP].

Can POAs be reduced?

Yes, by claim, if the taxpayer expects a lower current-year liability.

When are the balancing payment and CGT due?

31 January following the end of the tax year. Residential property CGT: payment on account within 60 days of completion.

When does interest on late-paid tax run, and on which payments?

From the due date to the day before payment. On POAs and balancing payments. (Rates are given in the exam.)

What is repayment supplement for overpaid tax?

Interest from the original payment date to the day before repayment. Tax-free.

When is the late-payment penalty date, and which payments does it apply to?

30 days after the due date. Balancing payment and CGT only (not POAs).

What are the late-payment penalties?

Paid by the penalty date: 0%. Within 5 months after it: 5% of unpaid tax. 5–11 months: 10%. Over 11 months: 15%.

How do interest, late-payment penalties and late-filing penalties differ?

Interest runs from the due date. Late-payment penalty starts 30 days after the due date (% of unpaid tax only). Late-filing penalty starts the day after the filing date (£100 fixed first).

What is the deadline for a compliance check notice?

Return filed on time: first anniversary of the actual filing date. Filed late: the next quarter day after that anniversary (31 Jan, 30 Apr, 31 Jul, 31 Oct).

When can HMRC raise a discovery assessment?

To recover tax lost, e.g. through a careless or deliberate understatement.

What is the maximum penalty for dishonest conduct of a tax agent?

£50,000.

What is the order of the tax appeals process?

Appeal to HMRC; optional internal review by an objective HMRC officer; then the Tax Tribunal.