Determinations under self-assessment
If you are issued with a notice to file a self-assessment tax return and do not file it on time HMRC can issue a determination of your tax liability within three years of the date that the return was originally due for submission. The Inspector will determine the tax liability to the best of his or her information and belief.
For this to be replaced with the correct figures a return has to be submitted within 12 months of the date of the determination. Otherwise the determined figure become final and conclusive so the only way out of an excessive determination is to claim ‘special relief’. For such a claim to be successful the following three conditions must be met – a) in the opinion of HMRC it would be unconscionable to seek to recover the tax or withhold repayment if already paid, b) the taxpayer’s affairs are otherwise up to date or arrangements made to bring them up to date; and c) the taxpayer has not previously relied on the provision.
So our general advice – do not get into this position in the first place!