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Recovery of overpaid tax etc |
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Income tax and capital gains tax |
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Claims for recovery of overpaid tax etc |
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1 | In TMA 1970, for sections 33 and 33A substitute— |
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“33 | Recovery of overpaid tax etc |
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Schedule 1AB contains provision for and in connection with claims |
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for the recovery of overpaid income tax and capital gains tax.” |
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2 | After Schedule 1AA to that Act insert— |
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Recovery of overpaid tax etc |
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Claim for relief for overpaid tax etc |
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1 (1) | This paragraph applies where— |
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(a) | a person has paid an amount by way of income tax or |
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capital gains tax but the person believes that the tax was |
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(b) | a person has been assessed as liable to pay an amount by |
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way of income tax or capital gains tax, or there has been a |
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determination or direction to that effect, but the person |
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believes that the tax is not due. |
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(2) | The person may make a claim to the Commissioners for |
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repayment or discharge of the amount. |
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(3) | Paragraph 2 makes provision about cases in which the |
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Commissioners are not liable to give effect to a claim under this |
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(4) | Paragraphs 3 to 7 (and sections 42 to 43C and Schedule 1A) make |
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further provision about making and giving effect to claims under |
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(5) | Paragraph 8 makes provision about the application of this |
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Schedule to amounts paid under contract settlements. |
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(6) | The Commissioners are not liable to give relief in respect of a case |
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described in sub-paragraph (1)(a) or (b) except as provided— |
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(a) | by this Schedule and Schedule 1A (following a claim under |
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(b) | by or under another provision of the Income Tax Acts or an |
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enactment relating to the taxation of capital gains. |
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(7) | For the purposes of this Schedule, an amount paid by one person |
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on behalf of another is treated as paid by the other person. |
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Cases in which Commissioners not liable to give effect to claim |
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2 (1) | The Commissioners are not liable to give effect to a claim under |
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this Schedule if or to the extent that the claim falls within a case |
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described in this paragraph (see also paragraph 4(5)). |
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(2) | Case A is where the amount paid, or liable to be paid, is excessive |
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(a) | a mistake in a claim, election or notice, |
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(b) | a mistake consisting of making or giving, or failing to make |
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or give, a claim, election or notice, |
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(c) | a mistake in allocating expenditure to a pool for the |
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purposes of the Capital Allowances Act or a mistake |
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consisting of making, or failing to make, such an |
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(d) | a mistake in bringing a disposal value into account for the |
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purposes of that Act or a mistake consisting of bringing, or |
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failing to bring, such a value into account. |
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(3) | Case B is where the claimant is or will be able to seek relief by |
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taking other steps under the Income Tax Acts or an enactment |
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relating to the taxation of capital gains. |
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(4) | Case C is where the claimant— |
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(a) | could have sought relief by taking such steps within a |
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period that has now expired, and |
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(b) | knew, or ought reasonably to have known, before the end |
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of that period that such relief was available. |
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(5) | Case D is where the claim is made on grounds that— |
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(a) | have been put to a court or tribunal in the course of an |
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appeal by the claimant relating to the amount paid or liable |
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(b) | have been put to Her Majesty’s Revenue and Customs in |
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the course of an appeal by the claimant relating to that |
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amount that is treated as having been determined by a |
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tribunal (by virtue of section 54 (settling of appeals by |
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(6) | Case E is where the claimant knew, or ought reasonably to have |
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known, of the grounds for the claim before the latest of the |
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(a) | the date on which an appeal by the claimant relating to the |
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amount paid, or liable to be paid, in the course of which the |
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ground could have been put forward (a “relevant appeal”) |
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was determined by a court or tribunal (or is treated as |
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having been so determined), |
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(b) | the date on which the claimant withdrew a relevant appeal |
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to a court or tribunal, and |
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(c) | the end of the period in which the claimant was entitled to |
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make a relevant appeal to a court or tribunal. |
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(7) | Case F is where the amount in question was paid or is liable to be |
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(a) | in consequence of proceedings enforcing the payment of |
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that amount brought against the claimant by Her Majesty’s |
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(b) | in accordance with an agreement between the claimant |
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and Her Majesty’s Revenue and Customs settling such |
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(a) | the amount paid, or liable to be paid, is excessive by reason |
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of a mistake in calculating the claimant’s liability to |
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income tax or capital gains tax (other than a mistake in a |
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PAYE assessment or PAYE calculation), and |
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(b) | liability was calculated in accordance with the practice |
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generally prevailing at the time. |
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(a) | the amount paid, or liable to be paid, is excessive by reason |
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of a mistake in a PAYE assessment or PAYE calculation, |
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(b) | the assessment or calculation was made in accordance |
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with the practice generally prevailing at the end of the |
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period of 12 months following the tax year for which the |
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assessment or calculation was made. |
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(10) | For the purposes of Cases G and H— |
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(a) | “PAYE assessment” means an assessment on the claimant |
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made in accordance with section 709 of ITEPA 2003 |
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(assessment in connection with PAYE deductions), and |
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(b) | “PAYE calculation” means a calculation of the amount of a |
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deduction or repayment made or to be made under PAYE |
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regulations in respect of tax estimated to be payable by the |
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3 (1) | A claim under this Schedule may not be made more than 4 years |
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after the end of the relevant tax year. |
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(2) | In relation to a claim made in reliance on paragraph 1(1)(a), the |
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(a) | where the amount paid, or liable to be paid, is excessive by |
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reason of a mistake in a return or returns under section 8, |
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8A or 12AA of this Act, the tax year to which the return (or, |
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if more than one, the first return) relates, and |
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(b) | otherwise, the tax year in respect of which the payment |
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(3) | In relation to a claim made in reliance on paragraph 1(1)(b), the |
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relevant tax year is the tax year to which the assessment, |
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determination or direction relates. |
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(4) | A claim under this Schedule may not be made by being included |
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in a return under section 8, 8A or 12AA of this Act. |
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The claimant: one person accountable for amounts payable by another etc |
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4 (1) | Sub-paragraph (2) applies where, under a relevant enactment, a |
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person (“P”) is accountable to the Commissioners for— |
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(a) | an amount representing income tax or capital gains tax |
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that is or is estimated to be payable by another person |
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(b) | any other amount that, under a relevant enactment, has |
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been or is to be set off against a liability of T. |
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(2) | A claim under this Schedule in respect of the amount may be made |
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(3) | Sub-paragraph (4) applies where— |
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(a) | a person (“P”) has paid an amount described in sub- |
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paragraph (1)(a) or (b) in the belief that P was accountable |
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to the Commissioners for the amount under a relevant |
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(b) | P was not so accountable. |
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(4) | A claim under this Schedule in respect of the amount may be made |
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(5) | The Commissioners are not liable to give effect to a claim under |
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sub-paragraph (4) if or to the extent that the amount has been |
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repaid to T or set against amounts payable to the Commissioners |
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(6) | “Relevant enactment” means— |
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(b) | Chapter 3 of Part 3 of the Finance Act 2004 or regulations |
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under that Chapter (construction industry scheme), or |
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(c) | any other provision of or made under the Taxes Acts. |
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The claimant: partnerships |
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5 (1) | This paragraph applies where— |
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(a) | a trade, profession or business is carried on by two or more |
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(b) | an amount is paid, or liable to be paid, by one or more of |
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those persons in accordance with a self-assessment, and |
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(c) | the amount is excessive by reason of a mistake in a |
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(2) | A claim under this Schedule in respect of the amount— |
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(a) | may be made by the relevant partner nominated to make |
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the claim by all of the relevant partners, and |
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(b) | may not be made by any other person. |
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(3) | In relation to such a claim, references in this Schedule to the |
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claimant are to any of the relevant partners. |
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(4) | “Relevant partner” means— |
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(a) | a person who was a partner in the partnership at any time |
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during the period in respect of which the partnership |
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(b) | the personal representative of such a person. |
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Assessment of claimant in connection with claim |
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6 (1) | This paragraph applies where— |
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(a) | a claim is made under this Schedule, |
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(b) | the grounds for giving effect to the claim also provide |
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grounds for a discovery assessment or determination on |
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the claimant in respect of any chargeable period, and |
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(c) | such an assessment or determination could be made but |
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for a relevant restriction. |
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(2) | “Discovery assessment or determination” means— |
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(a) | an assessment under section 29(1), or |
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(b) | a discovery assessment or discovery determination under |
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Schedule 18 to the Finance Act 1998 (company tax return |
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(3) | The following are relevant restrictions— |
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(a) | the conditions in section 29(3) to (5), |
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(b) | the restrictions in paragraphs 42 to 45 of Schedule 18 to the |
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(c) | the expiry of a time limit for making a discovery |
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assessment or determination. |
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(4) | Where this paragraph applies— |
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(a) | the relevant restrictions are to be disregarded, and |
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(b) | the discovery assessment or determination is not out of |
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time if it is made before the final determination of the |
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Amendment of partnership return etc in connection with claim |
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7 (1) | This paragraph applies where— |
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(a) | a claim is made under this Schedule, |
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(b) | the claimant is one of two or more persons carrying on a |
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trade, profession or business in partnership, |
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(c) | the grounds for giving effect to the claim also provide |
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grounds for amending, under section 30B(1) (discovery of |
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loss of tax from partnership), a return made by the |
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partnership or any of the partners in respect of any period, |
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(d) | such an amendment could be made but for a relevant |
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(2) | The following are relevant restrictions— |
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(a) | the conditions in section 30B(4) to (6), and |
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(b) | the expiry of a time limit for making an assessment under |
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(3) | Where this paragraph applies— |
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(a) | the relevant conditions are to be disregarded, and |
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(b) | the amendment is not out of time if it is made before the |
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final determination of the claim. |
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8 (1) | In paragraph 1(1)(a), the reference to an amount paid by way of |
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income tax or capital gains tax includes an amount paid under a |
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contract settlement in connection with income tax or capital gains |
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tax believed to be due from any person. |
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(2) | Sub-paragraphs (3) to (6) apply if the person who paid the amount |
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under the contract settlement (“the payer”) and the person from |
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whom the tax was due (“the taxpayer”) are not the same person. |
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(3) | In relation to a claim under this Schedule in respect of that |
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(a) | the references to the claimant in paragraph 2(5) to (7) |
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(Cases D, E and F) have effect as if they included the |
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(b) | the references to the claimant in paragraph 2(8)) and (10) |
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(Cases G and H) have effect as if they were references to |
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(c) | the references to the claimant in paragraphs 6(1)(b) and |
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7(1)(b) have effect as if they were references to the |
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(d) | references to tax in Schedule 1A (as it applies to a claim |
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under this Schedule) include such an amount. |
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(4) | Sub-paragraph (5) applies where the grounds for giving effect to a |
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claim by the payer in respect of the amount also provide grounds |
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for a discovery assessment or determination on the taxpayer in |
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respect of any chargeable period. |
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(5) | The Commissioners may set any amount repayable to the payer by |
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virtue of the claim against any amount payable by the taxpayer by |
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virtue of the assessment or determination. |
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(6) | The obligations of the Commissioners and the taxpayer are |
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discharged to the extent of any set-off under sub-paragraph (5). |
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“contract settlement” means an agreement made in |
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connection with any person’s liability to make a payment |
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to the Commissioners under or by virtue of an enactment; |
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“discovery assessment or determination” has the same |
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meaning as in paragraph 6. |
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9 (1) | In this Schedule “the Commissioners” means the Commissioners |
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for Her Majesty’s Revenue and Customs. |
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(2) | For the purposes of this Schedule, a claim is not finally determined |
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until it, or the amount to which it relates, can no longer be varied |
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(whether on appeal or otherwise).” |
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3 | TMA 1970 is amended as follows. |
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4 | For the heading before section 32 substitute “Overpaid tax, excessive |
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5 (1) | Section 43A (further assessments etc) is amended as follows. |
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(2) | After subsection (2A) insert— |
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“(2B) | For the purposes of this section and section 43B below, a claim under |
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Schedule 1AB is relevant in relation to an assessment for a year of |
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assessment if it relates to that year of assessment.” |
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(3) | In subsection (3), for “a claim” substitute “any other claim”. |
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6 (1) | In paragraph 1 of Schedule 1A (claims etc not included in returns), in the |
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definition of “partnership claim”, after “46(2)(b) of” insert “, or paragraph 5 |
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7 (1) | Paragraph 4 of that Schedule (giving effect to claims and amendments) is |
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(2) | In sub-paragraph (1)— |
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(a) | for “and (4)” substitute “to (5)”, and |
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(b) | omit “and to any other provision in the Taxes Acts which otherwise |
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(3) | In sub-paragraph (2), for “and (4)” substitute “to (5)”. |
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“(5) | This paragraph has effect subject to any provision in the Taxes |
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(a) | requires or allows effect to be given to a claim by other |
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(b) | provides that an amount is not to be discharged or repaid.” |
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8 | In Schedule 3ZA (date by which payment to be made after amendment or |
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correction of self-assessment), omit paragraph 10 (amendment following |
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claim for error or mistake relief). |
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9 (1) | Section 70H of CAA 2001 (lessee: requirement for tax return treating lease as |
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long funding lease) is amended as follows. |
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(2) | In subsection (2), for “for relief under the error or mistake provisions in |
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respect of” substitute “under the recovery provisions for relief in respect of |
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an amount paid or liable to be paid that is excessive by reason of”. |
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(a) | for ““the error or mistake provisions”” substitute ““the recovery |
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(b) | for “section 33 of” substitute “Schedule 1AB to”. |
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10 (1) | In relation to a relevant claim, paragraph 3(1) of Schedule 1AB to TMA 1970 |
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(inserted by this Part of this Schedule) has effect as if for “more than 4 years |
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after” there were substituted “more than 5 years after the 31st January next |
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