Owner-Managed Businesses

Interim payments during a compliance check

Produced by Tolley in association with Emma Broadbent of Grant Thornton
  • 21 Mar 2022 07:22

The following Owner-Managed Businesses guidance note Produced by Tolley in association with Emma Broadbent of Grant Thornton provides comprehensive and up to date tax information covering:

  • Interim payments during a compliance check
  • Interim payments during a compliance check
  • Certificates of tax deposit
  • Interest on deposits

Interim payments during a compliance check

Interim payments during a compliance check

Whenever HMRC establishes that the tax self-assessed by a taxpayer is insufficient, but the check is still to be completed, it will normally request an interim payment of the anticipated further liabilities.

Making an interim payment (which may also be referred to as a payment on account or an on-account payment) will benefit the taxpayer as it will:

  1. demonstrate to HMRC that the check is being taken seriously, with a realistic attitude being adopted to the likelihood of additional tax liabilities

  2. provide an indication of the taxpayer’s cooperation and willingness to bring his tax affairs up to date

  3. stop any late payment interest running on any corresponding amount of tax that may become due as a result of the check

  4. spread the payment of any tax, National Insurance, interest and penalties that may become due as a result of the check

  5. possibly encourage HMRC to be more sympathetic to a request for instalment arrangements if the balance due in settlement cannot be paid in one sum

If the taxpayer declines to make a payment voluntarily and significant additional liabilities have been established, HMRC will consider making either a jeopardy amendment (see EM1950) or a discovery

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