Weekly Tax Update – Monday 30 September 2013

1 PRIVATE CLIENT

1.1 Allocation of self assessment tax payments

HMRC allocated a self assessment tax payment made by John Francis in accordance with the policy set out in their Debt Management and Banking manual (DMBM210105 & 210120), against older debts before new debts. However this practice was not communicated to the taxpayer and is not set out in legislation.

The taxpayer gave no instructions as to how to allocate the payment and appealed against a penalty for late payment of the element of outstanding tax due on his most recent tax liability. The allocation to earlier debts by HMRC related to debts prior to 2010/11 which would have given rise to no further penalty if they remained outstanding.