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The expected liability under Self-Assessment (SA) is calculated based on statutory guidance outlined in Section 59A and Section 59B of the Taxes Management Act 1970, as referenced in your document.

Here’s how it works:

1. Starting point – prior year’s liability
   HMRC calculates your expected liability for the current tax year using your previous year’s total income tax and Class 4 NIC liability, less any tax already deducted at source (for example, PAYE or CIS).
2. Payments on account
   1. You are normally required to make two payments on account, each equal to 50% of the previous year’s net liability.
   1. These are due:
      1. 31 January during the tax year, and
      1. 31 July after the tax year ends.
         These advance payments are meant to cover your “expected” liability for the ongoing year.
3. Adjustments and balancing payment
   1. Once your Self Assessment tax return is filed, HMRC calculates the actual liability for the year.
   1. The difference between the actual amount owed and what has already been paid on account becomes your balancing payment, due by 31 January following the end of the tax year (Section 59B (1) – (4)).
4. Reductions or claims
   1. You may make a claim to reduce your payments on account under Section 59A(3) and (4) if you reasonably expect your current year’s income to be lower.
   1. However, excessive reductions made negligently or fraudulently can attract penalties under Section 59A(6).

So in summary:

Expected SA liability = 100% of the prior year’s net income tax and Class 4 NIC liability (excluding tax deducted at source), paid as two equal instalments on 31 January and 31 July.
Any remaining balance is paid the following 31 January once the actual figures are known.

Partnership appeals have specific procedures that differ significantly from individual appeals. Here’s how HMRC handles them:

Who Can Make Partnership Appeals

Strict Authority Requirements:

• Must be made by the nominated partner on behalf of all relevant partners
• OR by an authorized agent acting for the partnership/nominated partner
• Appeals from non-nominated partners will be refused
• Tribunals may reject appeals not made by the nominated partner

Verification Process: If it’s unclear who the nominated partner is, HMRC will:

• Issue SEES form SA670 to confirm the nominated partner’s name
• Make a Free Format Note on the Partnership record noting either:
  • “DD/MM/YY SA670 received. Nominated partner is [name]”
  • “YY/YY box 11.3 shows nominated partner as [name]”

Alternative Acceptance: Appeals can be accepted from:

• Partner shown in box 11.3 on internet-filed returns (current or previous year)
• Person who signed the paper return (if box 11.3 is empty)
• Agent acting for all partners (though verification may be needed for large partnerships)

Special Circumstances

Death of Nominated Partner:

• Successor is generally the person nominated by majority of other partners
• Must include personal representative of deceased partner in the majority
• SEES form SA670 must be issued to confirm new nominated partner

Agent Representation:

• Can accept from agent acting for all partners
• For large partnerships (hundreds of partners), practical verification may not be possible
• Issue SA670 to confirm nominated partner details

System Recording Process

Unique Aspects for Partnerships:

1. Record Location:
   • Appeal recorded only on partnership record
   • Do NOT record on individual partner records
   • Use penalty imposition date as charge creation date (may need to check partner records to find this)
2. Standover Procedures:
   • Informal standover penalty in full on each individual partner’s record
   • Note work list items: “Working with Partnership, responsible office and UTR”
   • Not necessary to record appeal on individual partner records
3. Cross-Reference Management:
   • Partner records should note any work list items
   • Include reference to partnership responsible office
   • Maintain clear audit trail between partnership and individual records

Settlement Process

When Appeal is Settled:

1. Update Individual Records:
   • Where possible, update each individual partner’s record
   • Reduce standovers to nil
   • If direct updating not possible, inform responsible office for each partner
2. Tribunal Considerations:
   • Ensure tribunal understands they’re considering penalties on all partner records
   • Provide clear documentation of all affected partners
3. Communication:
   • Notify all relevant offices of settlement outcome
   • Ensure consistent treatment across all partner records

Penalty Application Rules

Late Filing Penalties:

• All partners charged if partnership return not filed by due date
• Appeals must go through nominated partner
• Try to settle immediately if possible

Processing Approach:

• Handle through partnership record using nominated partner authority
• Apply informal standovers to individual partner penalties
• Maintain coordination between partnership and individual records

Administrative Notes

Work List Management:

• Appeals appear on partnership work list
• Individual partner standovers noted separately
• Cross-referencing essential for tracking

Documentation:

• Retain clear records of nominated partner status
• Document any changes in partnership composition
• Maintain audit trail for tribunal purposes

Quality Control:

• Regular review to ensure all partner records updated
• Coordinate between multiple responsible offices if needed
• Monitor for prompt settlement across all affected records

This partnership-specific process ensures that while the appeal is centrally managed through the nominated partner, the practical effects (like standovers) are properly applied to all affected individual partner records, maintaining both legal compliance and administrative efficiency.

A reasonable appeal typically involves either factual grounds or reasonable excuse. Here’s what counts:

Valid Grounds for Appeal

Factual Appeals

• The assessment, penalty, or charge is factually incorrect
• The return was actually filed on time
• Payment was made on time
• An agreed Time to Pay arrangement was already in place

Reasonable Excuse Appeals

A reasonable excuse is something that prevented the taxpayer from meeting their obligation despite taking reasonable care. It must be based on circumstances outside their control.

What HMRC Typically Accepts as Reasonable Excuse

Health-Related

• Serious illness preventing the taxpayer from filing/paying
• Mental health conditions (like PTSD) that impacted decision-making ability
• Hospitalization that prevented dealing with tax affairs
• Death of spouse/close relative that significantly impacted ability to meet obligations

External Circumstances

• COVID-19 pandemic impacts (widely accepted during the relevant period)
• Fire, flood, or theft that destroyed records or prevented filing
• Postal service disruption (with certificate of posting showing timely dispatch)
• HMRC online service failures with error messages as evidence

Technical Issues

• Computer/software failure just before filing deadline
• Delayed HMRC activation codes (if requested before deadline)
• Loss of tax records through circumstances beyond control

What HMRC Does NOT Accept

Explicitly Excluded by Law

• Shortage of funds (unless due to events completely outside taxpayer’s control)
• Reliance on another person (unless specific conditions met)

Commonly Rejected Reasons

• Pressure of work
• Tax return being “too difficult”
• Failure by tax agent
• Lack of information from third parties
• Not knowing how much tax to pay
• Absence of HMRC reminders
• Cheque made out incorrectly
• Lack of free HMRC software

Key Requirements

1. Timing: Appeals must be made within 30 days of the notice (37 days allowed for processing)
2. Writing: Should be in writing, though some telephone appeals accepted
3. Authority: Must be made by the taxpayer, authorized agent, or (for partnerships) the nominated partner
4. Prompt Action: Once the reasonable excuse ends, taxpayer must act without unreasonable delay (typically within 14 days)

Special Considerations

• Each case is assessed on its individual facts and circumstances
• What’s reasonable for one person may not be for another based on their abilities
• HMRC considers the taxpayer’s overall ability to manage their affairs during the period
• Disability may be relevant if it specifically prevented compliance, but existing disabilities require contingency planning

The key test is whether the circumstances genuinely prevented the taxpayer from meeting their obligations despite taking reasonable care, and whether they acted promptly once the excuse ended.

HMRC’s self-assessment infrastructure is governed by several key pieces of legislation:

Primary Legislation

Income and Corporation Taxes Act 1988 (ICTA 1988) – Contains numerous provisions including:

• Relief calculations for trading losses, farming profits, and personal pensions
• Post-cessation receipts and literary/artistic profits spreading
• Relief for losses on unquoted shares

Finance Act 1994 Chapter III – Establishes the foundational self-assessment framework:

• Personal and trustee returns (Section 178)
• Self-assessment requirements (Section 179)
• Partnership returns and assessments (Sections 184-185)

Taxes Management Act 1970 (TMA 1970) – Provides the administrative backbone:

• Revenue Determinations (Section 28C)
• Recovery powers for fraud/negligence (Section 29)
• Error relief provisions (Section 33)
• Payment on account rules (Section 59A)
• Balancing payment calculations (Section 59B)
• Penalty and surcharge provisions (Sections 59C, 93, 93A)
• Interest calculations (Section 86)

Taxation of Chargeable Gains Act 1992 (TCGA 1992) – Covers capital gains aspects including loss carry-back provisions

Supporting Legislation

Finance Acts 2008 & 2009 – Modern updates including:

• HMRC set-off powers (FA 2008)
• Updated interest calculation rules from 2011 onwards (FA 2009)

The Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682) – Governs PAYE interactions with self-assessment

This legislative framework creates a comprehensive system covering filing obligations, payment schedules, penalties, interest calculations, and HMRC’s administrative powers for self-assessment.

What are Payments on Account?

Payments on account (PoA) are advance payments towards your expected tax liability for the current year. They’re calculated as half of the previous year’s tax and National Insurance liability (after deducting capital gains tax, tax deducted at source, and other specific items).

When Can You Make a Claim?

You can claim to adjust payments on account if you believe:

• Your expected Self Assessment liability will be less than the calculated payments on account, or
• You’ll have no SA liability or it will be covered by tax deducted at source

Time Limit

Claims must be made by 31 January following the end of the tax year.

How to Make a Claim

Valid Methods

• Online: Using SA Online or form SA303 through Government Gateway
• In writing: Including fax or posted form SA303
• By phone: Only to HMRC Contact Centres

Requirements for a Valid Claim

1. Must be in writing (or through official online channels)
2. Give a clear reason for the reduction/increase
3. State the adjusted amounts or provide sufficient information to calculate them
4. Be signed (if on paper) by taxpayer or authorized agent
5. Received before the deadline (31 January after tax year end)

Acceptable Reasons for Reduction

• Business profits are down/business has ceased
• Other income has decreased
• Tax allowances and reliefs have increased
• More tax deducted at source than previous year
• Expecting to claim carry-back relief

Unacceptable Reasons

• “I am unable to pay” (this is about affordability, not liability)
• No reason given at all

The Process

Step 1: Submit Your Claim

• Complete form SA303 online or on paper
• Provide detailed reasons supporting your belief
• Specify the reduced amounts you believe are due

Step 2: HMRC Processing

Digital Processing (from April 2017)

Most online SA303 forms are processed automatically, creating SA notes with:

• Date received
• Reason code (1-4 corresponding to common reasons)
• New payment amounts

Manual Processing Required For:

• Mismatched personal details (name, address, NINO)
• Cases with special signals (Bankruptcy, Enquiry, Enforcement, etc.)
• Late submissions
• Complex cases

Step 3: HMRC Response

If Valid Claim Accepted:

• You’ll receive acknowledgment letter SA614 (warns about interest if reduction is excessive)
• Payments on account adjusted equally between both installments
• New amounts become due on original dates (31 January and 31 July)

If Invalid Claim:

• You’ll receive letter SA811 explaining why claim was rejected
• Original payment amounts remain unchanged

Important Consequences

Interest Implications

• If you reduce payments too much, you’ll be charged interest on any shortfall from the original due dates
• Interest charges apply even if your claim was made in good faith

Automatic Review

When you submit your actual tax return:

• HMRC compares your claimed reduction with actual liability
• If you over-reduced, interest is charged on the difference
• If actual liability is lower than even your reduced claim, excess payments may be refunded with interest

Penalties

Fraudulent or negligent claims can result in penalties.

Key Rules

Payment Splitting

• Adjustments always split equally between the two payments on account
• You cannot reduce just one payment

Minimum Thresholds

• No payments on account required if previous year’s liability was under £1,000
• OR if more than 80% was deducted at source
• However, if you claim to reduce below £1,000, the reduced amount is still payable

Multiple Claims

• You can revise your claim multiple times before the deadline
• Each revision replaces the previous claim entirely

What Happens Next?

1. Processing Priority: Claims receive priority attention and should be processed same day
2. Payment Allocation: Any overpayments from reduced claims remain on your account for future liabilities unless you request a refund
3. Time to Pay: If you have existing payment arrangements, these will be reviewed after claim processing

Tips for Success

• Be specific about why you expect lower liability
• Provide calculations supporting your estimate
• Consider all income sources when estimating total liability
• Submit early to avoid last-minute issues
• Keep records of your claim and reasoning

Remember: This is about your expected tax liability, not your ability to pay. If you’re having payment difficulties, you should explore Time to Pay arrangements separately.

Here are the key differences between an appeal and a review:

Appeal

What it is:

• Your initial challenge to an HMRC decision or charge
• A statutory right to dispute HMRC’s action
• The first step in the dispute process

Who handles it:

• Decision Maker (Appeals Handler or Review Interest Officer)
• Usually the same office that would normally handle your case
• Officer who made the original decision (in some cases)

Process:

• Must be made within 30 days of Notice of Liability
• Written (though some telephone/online appeals accepted)
• HMRC reviews the facts and makes a decision
• Charge typically stood over during consideration

Review

What it is:

• A second look by HMRC when they disagree with your appeal
• An internal HMRC process with a different officer
• Alternative to going straight to Tax Tribunal

Who handles it:

• Different HMRC officer who wasn’t involved in the original decision
• Often specialist review units (e.g., Appeal Review Unit in Nottingham)
• Independent internal review of the case

When it happens:

• After HMRC refuses your initial appeal
• HMRC offers you a review instead of immediate tribunal referral
• You can request a review if not offered
• You can decline and go straight to tribunal

The Sequence

1. HMRC Decision/Charge
         ↓
2. Your Appeal (within 30 days)
         ↓
3a. HMRC agrees → Appeal allowed
         OR
3b. HMRC disagrees → Review offered
         ↓
4. Review by different HMRC officer
         ↓
5a. Review upholds your position
         OR
5b. Review maintains HMRC position → Tax Tribunal option

Important Notes:

• You don’t have to accept a review – you can go straight to Tax Tribunal
• Review is free and often faster than tribunal
• Different perspective – fresh eyes on your case
• No time limit for HMRC to complete review (though they aim for reasonable timeframes)
• Tribunal remains available if review doesn’t resolve the matter

The review system was introduced to provide an independent internal challenge to HMRC decisions before the formal tribunal process, potentially saving time and costs for both parties.

Here’s how self-assessment appeals are performed:

How to Make an Appeal

Format and timing:

• In writing within 30 days of the Notice of Liability
• HMRC allows 37 days to account for printing and postal delivery (35 days for tax years 2009-10 and earlier)
• Some appeals accepted by telephone or online with proper customer verification
• Appeals via Personal or Business Tax Account are treated as signed appeals

Who can appeal:

• The taxpayer
• Someone acting in capacity
• An authorized agent
• For partnerships: nominated partner only (or their authorized agent)

HMRC’s Internal Appeal Process

Initial handling:

1. Decision Maker receives and considers the appeal
2. Appeals treated as priority post at all stages
3. Appeal recorded on SA system (only by Appeals Handler or Review Interest Officer)
4. Acknowledgment issued using appropriate form (SA525, SA526, SA527)
5. If penalty involved, charge is informally stood over pending determination

Office responsibility:

• Usually handled where received, except:
  • If there’s an open or closed enquiry → goes to enquiry officer
  • If office has no processing capability → forwarded to processing office

Appeal Outcomes

If HMRC agrees with you:

• Appeal allowed
• Charge cancelled/amended
• Appeal closed using MAINTAIN APPEAL function
• Standover reduced to nil
• Confirmation letter sent

If HMRC disagrees:

• Review offered (internal HMRC review by different officer)
• If you reject review → case can go to Tax Tribunal
• You can request tribunal consideration even for late appeals

Special Considerations

Reasonable excuse appeals:

• Must demonstrate circumstances prevented compliance
• Must show you acted without unreasonable delay once excuse ended
• Each case considered on individual facts and circumstances
• Common examples: serious illness, bereavement, fire/flood, HMRC system failures

Partnership appeals:

• Appeal recorded on partnership record only
• Informal standover applied to each partner’s record
• When settled, all partner records must be updated

Documentation required:

• Written appeal stating grounds
• Supporting evidence where possible (especially for reasonable excuse)
• Appeal papers filed and retained throughout process

What happens during the process:

• No automatic stay of collection (except for certain penalty types from 2010-11 onwards)
• Informal standover typically applied to prevent enforcement action
• Open Appeals Work List item created for tracking
• Regular review to ensure prompt handling

The process is designed to be accessible while maintaining proper verification and documentation standards.

Here are the specific aspects of self-assessment you can appeal against:

Charge-based items (items that create a charge on your SA record):

Penalties:

• Fixed penalty for late filing of SA return
• Daily penalty for late filing of SA return
• Tax geared penalty for late filing of SA return
• Tax geared penalty for incorrect SA return
• Tax geared penalty for failure to notify chargeability
• Tax geared penalty for late payment
• Tax geared penalty for excessive reduction of payments on account
• Penalty for failure to produce documents
• Penalty for failure to keep records
• Surcharge (for tax years 2009-10 and earlier)

Assessments and amendments:

• Revenue assessments
• Revenue amendments to SA return
• Jeopardy amendments

Non-charge-based items (no charge created on your record):

• HMRC requirement to produce documents
• Continuation of a Revenue enquiry
• Revenue amendment of a partnership statement

What you CANNOT appeal against:

• Your own self-assessment calculation
• Revenue determinations
• Interest charges
• Balancing payments
• Payments on Account (though you can claim to reduce them)
• Correction notices (but you can reject HMRC’s corrections)
• Revenue calculations

Appeal requirements:

• Must be made within 30 days of the Notice of Liability (37 days allowed for postal delivery)
• Should be in writing (though some appeals accepted by phone or online)
• Can be made by you, someone acting in capacity, or an authorized agent
• For partnerships: must be made by the nominated partner

Grounds for appeal:

For assessments/amendments:

• The assessment or amendment is incorrect
• The actual liability has yet to be determined

For penalties:

• Fact – e.g., return was filed on time, payment was made on time
• Reasonable excuse – e.g., prevented by illness, postal delays, HMRC system issues

The key distinction is that you can appeal HMRC’s actions and decisions, but not your own self-assessment calculations or automatic system calculations.

Based on the HMRC Self Assessment Manual, you cannot appeal against a self-assessment calculation itself. The manual specifically states that taxpayers have “no right of appeal” against:

• Revenue calculations
• Correction notices (though you do have the right to reject HMRC’s corrections)

However, you can appeal against certain related items that might affect your self-assessment calculation:

What you CAN appeal against:

Charge-based items:

• Revenue assessments
• Revenue amendments to your SA return
• Jeopardy amendments
• Various penalties (late filing, late payment, etc.)

Non-charge-based items:

• HMRC requirements to produce documents
• Continuation of an enquiry into your return
• Revenue amendments of partnership statements

Important distinctions:

• Self-assessment calculation = Your own calculation on your return (not appealable)
• Revenue calculation = HMRC’s calculation (not appealable)
• Revenue assessment/amendment = HMRC’s formal challenge to your figures (appealable)

What to do instead:

If you disagree with HMRC’s calculation, you should:

1. Check if it’s actually a Revenue assessment or amendment (which would be appealable)
2. If it’s a correction notice, you can reject the correction
3. Consider whether you need to file an amended return yourself
4. Seek professional tax advice if the matter is complex

Appeals must be made in writing within 30 days of receiving the notice, though HMRC allows 37 days to account for postal delivery time.