DST66100 - Introduction

Where a group member has not paid its full DST liability within certain time limits, HMRC may issue a notice of payment to other group member(s). The notice makes the unpaid DST liability the deemed liability of those group member(s). This notice is issued under FA20/PART2/S66.

Therefore, if a group’s liability remains unpaid, HMRC will be able to take action to recover the unpaid amounts. The selection by the designated HMRC officer of which group company will receive the notice, and be responsible for the deemed liability, will include an assessment of the resources available to the company and the ability for HMRC to enforce collection. The recipient of the notice does not need to be a UK incorporated company and the choice will reflect the designated officer’s view of the most cost-effective way for HMRC to fully recover the outstanding liabilities.

Effect of a payment notice

Where a person is in receipt of a payment notice, then the liability of the original person is their ‘deemed liability’. This liability includes all unpaid DST, penalties, interest as well as interest accruing after the date of the payment notice.

The deemed liability became due and payable when the relevant liability became due and payable. Any payments made in respect of the relevant liability are treated as made in respect of the deemed liability.

Effect of making intra-group payments

Where a recipient of a notice makes any payment towards a deemed liability, then they are entitled to recover that payment from the person with the outstanding liability. Payments made by the recipient of the notice towards a deemed liability are not allowed as deductions in calculating their income, profits or losses for any UK tax purposes. Similarly, any reimbursement of payment towards a deemed liability is not treated as a receipt.