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DMBM656080 | Enforcement action: distraint: after the levy: amendments to ITSA, CTSA and VAT debts

From HM Revenue & Customs · Debt Management and Banking Manual

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Claims to adjust ITSA POAs

Claims to adjust an SA POA may be made at any time before 31 January after the year of assessment.

The due date of the adjusted amount is not affected and you should continue collection, whatever stage you have reached in the distraint process.

Adjustment to POA reduces debt to nil

If an adjustment to a POA leaves nothing to pay

  • withdraw the distraint and tell the defaulter

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  • if appropriate, recall the papers from the auctioneer.

Adjustment to POA reduces or increases amount due

If an adjustment to a POA reduces or increases the amount due, after you have levied distraint

  • tell the taxpayer the revised amount

  • ask for immediate payment.

If the amount due is

  • increased - continue your action for the original amount plus costs and interest accruing on the original amount only (keep any surplus after sale, if there is one, and set it off against the unpaid balance)

  • reduced - continue your action uninterrupted for the reduced amount.

Determination superseded by a self assessment (ITSA and CTSA)

TMA70/S28C (4) (for ITSA) and Paragraph 40, Schedule 18, FA 1998 (for CTSA) both say that

  • if an Officer of the Board has started any proceedings to recover tax charged by a determination, and

  • the determination is superseded by a self assessment before those proceedings are concluded

the proceedings may be continued as if they had been proceedings for the unpaid amounts due under the self assessment.

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Self assessment reduces or increases amount due

If you have levied distraint for a determination and a self assessment reduces or increases the amount due

  • continue uninterrupted for the revised amount

  • tell the taxpayer you are doing this under TMA70/S28C (4) or Para 40, Sch 18, FA 1998, whichever applies

  • do not amend the distraint costs.

Officer’s VAT assessment

Officers’ VAT assessments are made if an error is found on an earlier return. They are legally enforceable and interest accrues.

If a return is received later for an officer’s assessment, the officer who made the assessment has to decide whether or not to accept it. If they do, the interest will be cancelled and replaced by a default surcharge.