Feedback 17 September 2020

HMRC misallocation of payments against the 31 July 2020 payment on account

Taxpayers making payments towards their self-assessment liabilities may find that HMRC allocates their payments in an unexpected way. Interest on late payment of the 2019-20 second payment on account which was due on 31 July 2020 has been waived as part of the government’s response to the coronavirus pandemic (SI 2020/934). The payment has not been deferred and remains due on 31 July 2020. So on HMRC’s computer system it appears as an overdue amount of tax.

It is HMRC’s standard procedure to allocate monies received against overdue charges first and then against charges that fall due within a 45-day period (HMRC’s Debt Management and Banking Manual at DMBM210160). So if a penalty notice in relation to an earlier tax year is issued with a due date that falls after 31 July 2020 the payment of...