EM4105 - SA Surcharge: Trigger Dates

TMA70/S59C

TMA70/S59C only applies to the 2009-10 tax year, and any previous tax year.

See CH155000+ for 2010-11 and subsequent tax years

  1. Introduction

(i) S59C(1) applies the section to IT, Class 4 NICs and CGT which have become payable under (only under) S55 or S59B.

(ii) S59C(2) and (3) impose surcharges on tax/NICs that remain unpaid on the day following the expiry of 28 days and 6 months from the due date.

(iii) S59C(12) defines the due date as the date on which the tax becomes due and payable.

(iv) The date on which any surcharge is “triggered” (not a statutory term) varies according to circumstances, S55 and S59B.

(v) In what follows, “Tax” means IT, CGT and Class 4 NICs or any combination.

(vi) Remember that notice is effectively “given” when it is received.

  1. Tax due on a standard timeous S9 self-assessment

The S59B amount, the “balancing payment”, is payable S59B(4) on 31 January following the year of assessment, so surcharges are triggered 28 days and 6 months after that, i.e. on anything unpaid at close of 28 February and 31 July.

  1. Tax due on any S9 self-assessment, whenever made, so long as para 4 below does not apply

The S59B amount, the “balancing payment”, is payable S59B(4) on 31 January following the year of assessment, so surcharges are triggered 28 days and 6 months after that, i.e. on anything unpaid at close of 28 February and 31 July.

  1. Tax due on S9 self-assessment where taxpayer gave S7 notice by 5 October following the year of assessment, but HMRC did not give S8 notice (“issue a return” in old paper terms) until after 31 October

S59B(3) says the S59B amount is payable within 3 months of HMRC giving the S8 notice, so surcharges are triggered 28 days and 6 months after that.

  1. Increased tax charged because HMRC “correct” the return, or because there is any kind of (upwards) amendment to a self-assessment

S59B(5) says the additional tax is payable by the day given in Schedule 3ZA. Too much detail there to reproduce here but basically (and assuming it is later than the normal S59B(3) or (4) date) the taxpayer gets 30 days in which to pay from the date the correction/amendment notice was given, so surcharges are triggered 28 days and 6 months after that.

  1. Tax put in charge by a “Revenue” determination S28C

S28C(3) says that until such time (if any) as it is superseded by a S9 self-assessment in a return, the determination shall have effect as if it were such a self-assessment. Since - S28C(1)(b) - the determination cannot be made until after the filing date, S59B(3) and (4) will operate as in paras 3 and 4 above. So in a standard case of a return issued on time but still outstanding, surcharges are triggered the day after 28 February and 31 July following the year of assessment, however much later the determination may get made.

And S59B(5A) maintains the due and payable date in S59B(3) or (4), and therefore the surcharge trigger dates, even if/when the determination is superseded by a S9 self-assessment on delivery of the outstanding return.

  1. Tax charged by a “Discovery” assessment S29

S59B(6) says the tax is payable within 30 days of the day on which notice of the assessment is given, so surcharges are triggered 28 days and 6 months after that.

  1. Appeals with postponement applications S55

If there is an appeal against an amendment or assessment but no postponement application, nothing changes. If there is a S55 postponement application

  • The non-postponed amount is payable as if it were tax on an assessment/amendment, notice of which was given on the date the tribunal determined the postponement application - S55(6) - or the date a S55(7) agreement was put in writing - S55(8). The surcharges are triggered 28 days and 6 month after the due date on that basis. [So, most often, the first surcharge is triggered on tax unpaid 58 days after the postponement application is settled, plus the notice-giving/receiving interval].
  • The postponed amount becomes due and payable as it were tax on an assessment/amendment, notice of which was given on the date HMRC gave the appellant notice of the total tax payable following the determination of the appeal - S55(9). The surcharges are triggered 28 days and 6 months after the due date on that basis. [So, most often, the first surcharge is triggered on tax unpaid 58 days after notice is given of the amended tax, or of the unchanged tax if there is no amendment, following determination of the appeal].
  1. A point to consider in “FTN” and “late Return” cases

When a S7(8) failure to notify case comes to light and returns are then issued, or there is a S93 failure to make returns:

  • The returns might be completed, delivered and then “processed”. That is to say, the taxpayer makes self-assessments S9. If so, as per para 3 above, the surcharges are instantly triggered, as at the 28 February and 31 July after the year of assessment.
  • On the other hand if S29 assessments were made, as per para 7 above the taxpayer has 58 days from HMRC giving notice of those assessments in which to pay up and avoid surcharge.
  • On any tax on which a tax-geared penalty - S7(8); S93(5) - is imposed surcharges will be eradicated by S59C(4). But in any case without tax-geared penalties there is this variation in surcharge trigger dates.