Taxes Management Act 1970 Schedule 1B paragraph 4

Relief claimed by virtue of section 224(4) of ITTOIA 2005

Schedule 1B paragraph 4 deals with how out-of-time tax relief claims are handled when they arise because a person has elected for profits averaging under Chapter 16 of Part 2 of ITTOIA 2005 (for example, farmers or creative artists averaging their profits over two or five consecutive tax years).

• This paragraph applies where a person who has elected for profits averaging makes or amends a claim for tax relief that would otherwise be out of time, but is permitted by section 224(4) of ITTOIA 2005.
• The claim or amendment must be treated as relating to the last of the two or five consecutive years of assessment covered by the averaging election.
• Where the claim relates to income of an earlier year, the amount claimed is the difference between the tax actually chargeable for that earlier year and the tax that would have been chargeable if the claim had been given effect in that year, taking into account any associated claims.
• The effect of the claim is delivered by adjusting the tax payable for the last of the two or five years, either by increasing the tax due or by increasing the aggregate amount treated as already paid under section 59B(1)(b).