SACM9015 | Consequential Claims after Assessment and Amendment: Non-Culpable Additions

Throughout this manual legislative references are to the Taxes Management Act 1970 (TMA70), unless otherwise stated.

Where you

• amend a return in an SA enquiry closure notice, or

• make a discovery assessment for reasons other than careless or deliberate behaviour

the taxpayer can make a relevant out-of-time claim, election, application or notice within one year from the end of the year of assessment in which the notice is issued. S43A and S43C(2).

In S43A for a claim, election, application or notice to be relevant to an amendment or assessment it must

• relate to the same year of assessment, or

• be made or given by reference to an event in that year, see S43A(3).

The taxpayer can also

• amend a claim, election, application or notice already made, or

• revoke a claim, election, application or notice, except where it is irrevocable in law.

The effect of the taxpayer making, revoking or amending a claim, election, application or notice is limited to the additional liability to tax resulting from the assessment or your amendment.

So if an ITSA enquiry increases a taxpayer’s self assessment by £1,500 tax, the effect of any out-of-time claims or elections is limited to £1,500, see S43B(3)). Any 'excess' tax effect of the claim or election 'shall not be available to reduce any liability to tax'.

Specifically excluded from S43A by subsection 2A are

• elections as to transfer of married couple’s allowance, see ITA07/S47-49

• elections to transfer personal allowance to a spouse or civil partner, see ITA07/S55C

• elections for assets to be re-based to 1982, see TCGA92/S35.

Where the taxpayer’s action would alter the liability of another person, they will need the written consent of that other person, see S43B(1).