DMBM215190 - Payment processing and accounting: payment allocation, overpayments and repayments: Duty Repaid In Error Refunded (DRIER): S30 Taxes Management Act (TMA) 1970 assessments
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Section 30 test
Section 30 TMA 1970 should be considered by any officer discovering an over-repayment where Section 29 TMA1970 and Finance Act 1998, Schedule 18, Para 52 are not appropriate. S30 TMA 1970 assessments are made to recover over-repayments of IT, CT and NIC class 4 where a repayment has been made in error.
Examples where S30 is appropriate:
A) a customer has paid tax of £1,000 and is due a repayment of £50. The repayment is made for £500 in error. A S30 assessment can be raised for £450.
B) a customer has paid tax of £5,000 and is due a repayment of £1,000 plus £100 repayment interest. The repayment is made, and a duplicate repayment is made at a later date. A S30 assessment can be raised for £1,100.
Note: Section 30 assessments are not appropriate where the over-repayment was not originally held as a payment of tax/Nic from the customer.
Examples where S30 is not appropriate:
A) a customer pays tax of £100, which is due to be repaid. The repayment is issued for £1,000. The £900 is not an over-repayment of tax as it was not paid in the first place.
B) customer X pays £500 which is incorrectly allocated against customer Y's record, which becomes overpaid and a repayment is issued. The repayment is not a repayment of tax because customer Y never paid the amount that caused the overpayment in the first place.
Action to take
Where the test is satisfied, arrange for an assessment to be made
and note your case papers accordingly.
Important Note
After applying either test, if there is any doubt that assessment is appropriate, raise a DRIER charge.