Commentary

V5.381 Payments on account (poa) scheme

Part V5 Compliance, enforcement and appeals

V5.381 Payments on account (poa) scheme

V5.381 Payments on account (poa) scheme

A person who is required to make payments on account1 will become liable to a default surcharge where2

  1.  

    (1)     he has been served with a surcharge liability notice;

  2.  

    (2)     he is in default in respect of a prescribed accounting period;

  3.  

    (3)     that prescribed accounting period falls within the surcharge liability period specified in the notice; and

  4.  

    (4)     the aggregate value of defaults within that prescribed accounting period exceeds zero.

A person is in default where—

  1.  

    (1)     he fails to submit his return by the due date3;

  2.  

    (2)     having submitted his return, he fails to make payment in respect of that return by the due date4; or

  3.  

    (3)     he fails to make a payment due under the payment on account scheme5.

HMRC state the a liability to a surcharge will not arise if a person fails to make a payment on account where the return shows a nil or repayment amount. A surcharge liability notice will be issued, extending any surcharge period, but there will be no increase in the rate of surcharge. Notice 700/50/21 (September 2021) para 4.4.

If, within any prescribed accounting period a person defaults once or more, he will be served with a surcharge liability notice specifying a surcharge liability period6. This period begins on the date of the notice, and ends one year after the end of the prescribed accounting

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