‘Equitable Liability’ is a process that allows the taxman to give up tax demands in unfair situations, instead of collecting what is strictly due by law. It can be a very valuable process for people who have got behind with their affairs and have received excessive estimates from HMRC.
If you don’t send in a Self Assessment, HMRC can issue an estimate of the tax due. This is called a determination. These ‘Determinations’ can only be replaced by filing a tax return within three years from the statutory filing date or 12 months from the issue of the determination, or having a reasonable excuse acceptable to the taxman; otherwise the estimated tax becomes legally enforceable.
‘Equitable Liability’ is a concession whereby HMRC collects only the money that would have been due if the taxpayer had sent their return on time. In 2009 HMRC announced that they planned to withdraw this concession from 1 April 2010. The proposal was strongly opposed by tax specialists, such as Lynam Tax. It’s an essential safety net which protects taxpayers who face demands which are technically legal but bear no relation to what the real tax bill would have been.
The Government listened to our representations and will now make Equitable Liability a legal right as long as a taxpayer:
- Shows that the estimated tax is excessive;
- Reports the correct amount; and
- Brings his tax affairs up to date, including payment of any outstanding tax, interest and penalties.
Can Equitable Liability help me?
If you have received an excessive HMRC determination of income or corporation tax and are too late to file your tax return and can demonstrate that the sums charged are excessive, you may be able to use Equitable Liability to dramatically reduce the tax demand.
However, experience shows us that simply making an Equitable Liability claim will not automatically produce a fair response from your tax inspector. Lynam Tax Dispute Specialists have decades’ experience of successfully pursuing claims against the taxman.
If you are facing an unfair tax demand why not consult the tax experts?
Call Paul Lynam today for a sympathetic and completely confidential, no obligation, discussion. Call now on 0845 643 9997.