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Coding out self assessment balancing payment

04 May 2021 / Keith M Gordon
Issue: 4790 / Categories: Comment & Analysis
Trust in the balance

Key points

  • The taxpayer wished to code out his balancing payment which was less than £3 000.
  • HMRC refused because the total tax liability was about £8 000.
  • Published guidance states the £3 000 threshold applies to the taxpayer’s net liability.
  • HMRC seemed to give a fresh definition to balancing payment but there has been no official change of policy.

When I read the Readers’ forum query ‘Self-assessment confusion’ (Taxation 4 March 2021 page 25) I was stunned. Unless the facts were not as portrayed the query revealed (or some would say further evidenced) a fundamental problem within HMRC that needs to be urgently addressed.

With the kind intervention of the Taxation editorial team and the assistance of the original querist I was able to examine the relevant correspondence (anonymised) to see what was really going on.

Original query

The original query concerned a penalty and...

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