Finance Act 1994

192Payments on account of income tax

After Part V of the Management Act there shall be inserted the following section—

“Part VAPayment of Tax

59APayments on account of income tax

(1)This section applies to any person (the taxpayer) as regards a year of assessment if as regards the immediately preceding year—

(a)he has been assessed to income tax under section 9 of this Act in any amount, and

(b)that amount (the assessed amount) exceeds the amount of any income tax which has been deducted at source, and

(c)the amount of the excess (the relevant amount) is not less than such amount as may be prescribed by regulations made by the Board, and

(d)the proportion which the relevant amount bears to the assessed amount is not less than such proportion as may be so prescribed.

(2)Subject to subsection (3) below, the taxpayer shall make two payments on account of his liability to income tax for the year of assessment—

(a)the first on or before the 31st January in that year, and

(b)the second on or before the next following 31st July;

and, subject to subsection (4) below, each of those payments on account shall be of an amount equal to 50 per cent. of the relevant amount.

(3)If, at any time before the 31st January next following the year of assessment, the taxpayer makes a claim under this subsection stating—

(a)his belief that he will not be assessed to income tax for that year, or that the amount in which he will be so assessed will not exceed the amount of income tax deducted at source, and

(b)his grounds for that belief,

each of the payments on account shall not be, and shall be deemed never to have been, required to be made.

(4)If, at any time before the 31st January next following the year of assessment, the taxpayer makes a claim under this subsection stating—

(a)his belief that the amount in which he will be assessed to income tax for that year will exceed the amount of income tax deducted at source by a stated amount which is less than the relevant amount, and

(b)his grounds for that belief,

the amount of each of the payments on account required to be made shall be, and shall be deemed always to have been, equal to 50 per cent. of the stated amount.

(5)Where the taxpayer makes a claim under subsection (3) or (4) above, there shall be made all such adjustments, whether by the repayment of amounts paid on account or otherwise, as may be required to give effect to the provisions of that subsection.

(6)Where the taxpayer fraudulently or negligently makes any incorrect statement in connection with a claim under subsection (3) or (4) above, he shall be liable to a penalty not exceeding the difference between—

(a)the amount which would have been payable on account if he had made a correct statement, and

(b)the amount of the payment on account (if any) made by him.

(7)The provisions of the Income Tax Acts as to the recovery of income tax shall apply to an amount falling to be paid on account of tax in the same manner as they apply to an amount of tax.

(8)In this section any reference to income tax deducted at source is a reference to—

(a)income tax deducted or treated as deducted from any income or treated as paid on any income, or

(b)any amount which, in respect of the year of assessment, is to be deducted at source under section 203 of the principal Act in a subsequent year, or is a tax credit to which section 231 of that Act applies.”