EM3850 - Concluding an Enquiry: SA Legislation: Calculating the Amount of Tax on an SA Partial or Final Closure Notice

TMA70/S9

Your partial or final closure notice must state your conclusions and make any amendment necessary to give effect to your conclusions. The taxpayer’s self assessment contains two elements.

Firstly, it comprises `an assessment of the amounts in which, on the basis of the information contained in the return and taking into account any relief or allowance a claim for which is included in the return, the person making the return is chargeable to income tax and capital gains tax for the year of assessment’ (subsection 1(a)).

Secondly, it includes `an assessment of the amount payable by him by way of income tax, that is to say, the difference between the amount in which he is assessed to income tax under paragraph (a) above and the aggregate amount of any income tax deducted at source and any tax credits to which section 397(1) of ITTOIA 2005 applies’ - (Subsection 1(b)).

A self assessment may be a positive (payable) or a negative (repayable) figure

Your enquiry closure amendment amends the return in terms of the tax whether resulting from a partial or final closure notice. Such a figure must take into account any tax deducted at source and tax credits which fall to be included in the self assessment under Subsection 1(b).

A statement in terms of an amount of tax which does not distinguish between its constituent parts is sufficient to satisfy the statutory requirement.

Class 4 NIC is brought within the provisions of the Taxes Acts by Section 15 et seq, Social Security Contributions and Benefits Act 1992. Section 16 (1) states that `All the provisions of the Income Tax Acts …. shall …. apply in relation to Class 4 contributions …. as if those contributions were income tax ….’.

However, you should ensure that the basis of that single figure is made clear in supporting computations.

For individual taxpayers a simple way to identify the amount to be entered in your partial or final closure notice is to calculate the figure that should, in your opinion, have appeared in box 18.3 in the SA Return for 1996/97 onwards.

Examples of the figures to be put in closure notices can be found at EM3851.