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Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax

376

 

Schedule 52

Section 99

 

Recovery of overpaid tax etc

Part 1

Income tax and capital gains tax

Claims for recovery of overpaid tax etc

5

1          

In TMA 1970, for sections 33 and 33A substitute—

“33     

Recovery of overpaid tax etc

Schedule 1AB contains provision for and in connection with claims

for the recovery of overpaid income tax and capital gains tax.”

2          

After Schedule 1AA to that Act insert—

10

“Schedule 1AB

Section 33

 

Recovery of overpaid tax etc

Claim for relief for overpaid tax etc

1     (1)  

This paragraph applies where—

(a)   

a person has paid an amount by way of income tax or

15

capital gains tax but the person believes that the tax was

not due, or

(b)   

a person has been assessed as liable to pay an amount by

way of income tax or capital gains tax, or there has been a

determination or direction to that effect, but the person

20

believes that the tax is not due.

      (2)  

The person may make a claim to the Commissioners for

repayment or discharge of the amount.

      (3)  

Paragraph 2 makes provision about cases in which the

Commissioners are not liable to give effect to a claim under this

25

Schedule.

      (4)  

Paragraphs 3 to 7 (and sections 42 to 43C and Schedule 1A) make

further provision about making and giving effect to claims under

this Schedule.

      (5)  

Paragraph 8 makes provision about the application of this

30

Schedule to amounts paid under contract settlements.

      (6)  

The Commissioners are not liable to give relief in respect of a case

described in sub-paragraph (1)(a) or (b) except as provided—

(a)   

by this Schedule and Schedule 1A (following a claim under

this paragraph), or

35

(b)   

by or under another provision of the Income Tax Acts or an

enactment relating to the taxation of capital gains.

      (7)  

For the purposes of this Schedule, an amount paid by one person

on behalf of another is treated as paid by the other person.

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax

377

 

Cases in which Commissioners not liable to give effect to claim

2     (1)  

The Commissioners are not liable to give effect to a claim under

this Schedule if or to the extent that the claim falls within a case

described in this paragraph (see also paragraph 4(5)).

      (2)  

Case A is where the amount paid, or liable to be paid, is excessive

5

by reason of—

(a)   

a mistake in a claim, election or notice,

(b)   

a mistake consisting of making or giving, or failing to make

or give, a claim, election or notice,

(c)   

a mistake in allocating expenditure to a pool for the

10

purposes of the Capital Allowances Act or a mistake

consisting of making, or failing to make, such an

allocation, or

(d)   

a mistake in bringing a disposal value into account for the

purposes of that Act or a mistake consisting of bringing, or

15

failing to bring, such a value into account.

      (3)  

Case B is where the claimant is or will be able to seek relief by

taking other steps under the Income Tax Acts or an enactment

relating to the taxation of capital gains.

      (4)  

Case C is where the claimant—

20

(a)   

could have sought relief by taking such steps within a

period that has now expired, and

(b)   

knew, or ought reasonably to have known, before the end

of that period that such relief was available.

      (5)  

Case D is where the claim is made on grounds that—

25

(a)   

have been put to a court or tribunal in the course of an

appeal by the claimant relating to the amount paid or liable

to be paid, or

(b)   

have been put to Her Majesty’s Revenue and Customs in

the course of an appeal by the claimant relating to that

30

amount that is treated as having been determined by a

tribunal (by virtue of section 54 (settling of appeals by

agreement)).

      (6)  

Case E is where the claimant knew, or ought reasonably to have

known, of the grounds for the claim before the latest of the

35

following—

(a)   

the date on which an appeal by the claimant relating to the

amount paid, or liable to be paid, in the course of which the

ground could have been put forward (a “relevant appeal”)

was determined by a court or tribunal (or is treated as

40

having been so determined),

(b)   

the date on which the claimant withdrew a relevant appeal

to a court or tribunal, and

(c)   

the end of the period in which the claimant was entitled to

make a relevant appeal to a court or tribunal.

45

      (7)  

Case F is where the amount in question was paid or is liable to be

paid—

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax

378

 

(a)   

in consequence of proceedings enforcing the payment of

that amount brought against the claimant by Her Majesty’s

Revenue and Customs, or

(b)   

in accordance with an agreement between the claimant

and Her Majesty’s Revenue and Customs settling such

5

proceedings.

      (8)  

Case G is where—

(a)   

the amount paid, or liable to be paid, is excessive by reason

of a mistake in calculating the claimant’s liability to

income tax or capital gains tax (other than a mistake in a

10

PAYE assessment or PAYE calculation), and

(b)   

liability was calculated in accordance with the practice

generally prevailing at the time.

      (9)  

Case H is where—

(a)   

the amount paid, or liable to be paid, is excessive by reason

15

of a mistake in a PAYE assessment or PAYE calculation,

and

(b)   

the assessment or calculation was made in accordance

with the practice generally prevailing at the end of the

period of 12 months following the tax year for which the

20

assessment or calculation was made.

     (10)  

For the purposes of Cases G and H—

(a)   

“PAYE assessment” means an assessment on the claimant

made in accordance with section 709 of ITEPA 2003

(assessment in connection with PAYE deductions), and

25

(b)   

“PAYE calculation” means a calculation of the amount of a

deduction or repayment made or to be made under PAYE

regulations in respect of tax estimated to be payable by the

claimant.

Making a claim

30

3     (1)  

A claim under this Schedule may not be made more than 4 years

after the end of the relevant tax year.

      (2)  

In relation to a claim made in reliance on paragraph 1(1)(a), the

relevant tax year is—

(a)   

where the amount paid, or liable to be paid, is excessive by

35

reason of a mistake in a return or returns under section 8,

8A or 12AA of this Act, the tax year to which the return (or,

if more than one, the first return) relates, and

(b)   

otherwise, the tax year in respect of which the payment

was made.

40

      (3)  

In relation to a claim made in reliance on paragraph 1(1)(b), the

relevant tax year is the tax year to which the assessment,

determination or direction relates.

      (4)  

A claim under this Schedule may not be made by being included

in a return under section 8, 8A or 12AA of this Act.

45

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax

379

 

The claimant: one person accountable for amounts payable by another etc

4     (1)  

Sub-paragraph (2) applies where, under a relevant enactment, a

person (“P”) is accountable to the Commissioners for—

(a)   

an amount representing income tax or capital gains tax

that is or is estimated to be payable by another person

5

(“T”), or

(b)   

any other amount that, under a relevant enactment, has

been or is to be set off against a liability of T.

      (2)  

A claim under this Schedule in respect of the amount may be made

only by T.

10

      (3)  

Sub-paragraph (4) applies where—

(a)   

a person (“P”) has paid an amount described in sub-

paragraph (1)(a) or (b) in the belief that P was accountable

to the Commissioners for the amount under a relevant

enactment, but

15

(b)   

P was not so accountable.

      (4)  

A claim under this Schedule in respect of the amount may be made

only by P.

      (5)  

The Commissioners are not liable to give effect to a claim under

sub-paragraph (4) if or to the extent that the amount has been

20

repaid to T or set against amounts payable to the Commissioners

by T.

      (6)  

“Relevant enactment” means—

(a)   

PAYE regulations,

(b)   

Chapter 3 of Part 3 of the Finance Act 2004 or regulations

25

under that Chapter (construction industry scheme), or

(c)   

any other provision of or made under the Taxes Acts.

The claimant: partnerships

5     (1)  

This paragraph applies where—

(a)   

a trade, profession or business is carried on by two or more

30

persons in partnership,

(b)   

an amount is paid, or liable to be paid, by one or more of

those persons in accordance with a self-assessment, and

(c)   

the amount is excessive by reason of a mistake in a

partnership return.

35

      (2)  

A claim under this Schedule in respect of the amount—

(a)   

may be made by the relevant partner nominated to make

the claim by all of the relevant partners, and

(b)   

may not be made by any other person.

      (3)  

In relation to such a claim, references in this Schedule to the

40

claimant are to any of the relevant partners.

      (4)  

“Relevant partner” means—

(a)   

a person who was a partner in the partnership at any time

during the period in respect of which the partnership

return was made, or

45

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax

380

 

(b)   

the personal representative of such a person.

Assessment of claimant in connection with claim

6     (1)  

This paragraph applies where—

(a)   

a claim is made under this Schedule,

(b)   

the grounds for giving effect to the claim also provide

5

grounds for a discovery assessment or determination on

the claimant in respect of any chargeable period, and

(c)   

such an assessment or determination could be made but

for a relevant restriction.

      (2)  

“Discovery assessment or determination” means—

10

(a)   

an assessment under section 29(1), or

(b)   

a discovery assessment or discovery determination under

Schedule 18 to the Finance Act 1998 (company tax return

etc).

      (3)  

The following are relevant restrictions—

15

(a)   

the conditions in section 29(3) to (5),

(b)   

the restrictions in paragraphs 42 to 45 of Schedule 18 to the

Finance Act 1998, and

(c)   

the expiry of a time limit for making a discovery

assessment or determination.

20

      (4)  

Where this paragraph applies—

(a)   

the relevant restrictions are to be disregarded, and

(b)   

the discovery assessment or determination is not out of

time if it is made before the final determination of the

claim.

25

Amendment of partnership return etc in connection with claim

7     (1)  

This paragraph applies where—

(a)   

a claim is made under this Schedule,

(b)   

the claimant is one of two or more persons carrying on a

trade, profession or business in partnership,

30

(c)   

the grounds for giving effect to the claim also provide

grounds for amending, under section 30B(1) (discovery of

loss of tax from partnership), a return made by the

partnership or any of the partners in respect of any period,

and

35

(d)   

such an amendment could be made but for a relevant

restriction.

      (2)  

The following are relevant restrictions—

(a)   

the conditions in section 30B(4) to (6), and

(b)   

the expiry of a time limit for making an assessment under

40

that section.

      (3)  

Where this paragraph applies—

(a)   

the relevant conditions are to be disregarded, and

(b)   

the amendment is not out of time if it is made before the

final determination of the claim.

45

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax

381

 

Contract settlements

8     (1)  

In paragraph 1(1)(a), the reference to an amount paid by way of

income tax or capital gains tax includes an amount paid under a

contract settlement in connection with income tax or capital gains

tax believed to be due from any person.

5

      (2)  

Sub-paragraphs (3) to (6) apply if the person who paid the amount

under the contract settlement (“the payer”) and the person from

whom the tax was due (“the taxpayer”) are not the same person.

      (3)  

In relation to a claim under this Schedule in respect of that

amount—

10

(a)   

the references to the claimant in paragraph 2(5) to (7)

(Cases D, E and F) have effect as if they included the

taxpayer,

(b)   

the references to the claimant in paragraph 2(8)) and (10)

(Cases G and H) have effect as if they were references to

15

the taxpayer,

(c)   

the references to the claimant in paragraphs 6(1)(b) and

7(1)(b) have effect as if they were references to the

taxpayer, and

(d)   

references to tax in Schedule 1A (as it applies to a claim

20

under this Schedule) include such an amount.

      (4)  

Sub-paragraph (5) applies where the grounds for giving effect to a

claim by the payer in respect of the amount also provide grounds

for a discovery assessment or determination on the taxpayer in

respect of any chargeable period.

25

      (5)  

The Commissioners may set any amount repayable to the payer by

virtue of the claim against any amount payable by the taxpayer by

virtue of the assessment or determination.

      (6)  

The obligations of the Commissioners and the taxpayer are

discharged to the extent of any set-off under sub-paragraph (5).

30

      (7)  

In this paragraph—

“contract settlement” means an agreement made in

connection with any person’s liability to make a payment

to the Commissioners under or by virtue of an enactment;

“discovery assessment or determination” has the same

35

meaning as in paragraph 6.

Interpretation

9     (1)  

In this Schedule “the Commissioners” means the Commissioners

for Her Majesty’s Revenue and Customs.

      (2)  

For the purposes of this Schedule, a claim is not finally determined

40

until it, or the amount to which it relates, can no longer be varied

(whether on appeal or otherwise).”

Consequential amendments

3          

TMA 1970 is amended as follows.

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax

382

 

4          

For the heading before section 32 substitute “Overpaid tax, excessive

assessments etc”.

5     (1)  

Section 43A (further assessments etc) is amended as follows.

      (2)  

After subsection (2A) insert—

“(2B)   

For the purposes of this section and section 43B below, a claim under

5

Schedule 1AB is relevant in relation to an assessment for a year of

assessment if it relates to that year of assessment.”

      (3)  

In subsection (3), for “a claim” substitute “any other claim”.

6     (1)  

In paragraph 1 of Schedule 1A (claims etc not included in returns), in the

definition of “partnership claim”, after “46(2)(b) of” insert “, or paragraph 5

10

of Schedule 1AB to,”.

7     (1)  

Paragraph 4 of that Schedule (giving effect to claims and amendments) is

amended as follows.

      (2)  

In sub-paragraph (1)—

(a)   

for “and (4)” substitute “to (5)”, and

15

(b)   

omit “and to any other provision in the Taxes Acts which otherwise

provides”.

      (3)  

In sub-paragraph (2), for “and (4)” substitute “to (5)”.

      (4)  

Insert at the end—

    “(5)  

This paragraph has effect subject to any provision in the Taxes

20

Acts that—

(a)   

requires or allows effect to be given to a claim by other

means, or

(b)   

provides that an amount is not to be discharged or repaid.”

8          

In Schedule 3ZA (date by which payment to be made after amendment or

25

correction of self-assessment), omit paragraph 10 (amendment following

claim for error or mistake relief).

9     (1)  

Section 70H of CAA 2001 (lessee: requirement for tax return treating lease as

long funding lease) is amended as follows.

      (2)  

In subsection (2), for “for relief under the error or mistake provisions in

30

respect of” substitute “under the recovery provisions for relief in respect of

an amount paid or liable to be paid that is excessive by reason of”.

      (3)  

In subsection (3)—

(a)   

for ““the error or mistake provisions”” substitute ““the recovery

provisions””, and

35

(b)   

for “section 33 of” substitute “Schedule 1AB to”.

Transitional provision

10    (1)  

In relation to a relevant claim, paragraph 3(1) of Schedule 1AB to TMA 1970

(inserted by this Part of this Schedule) has effect as if for “more than 4 years

after” there were substituted “more than 5 years after the 31st January next

40

following”.

 
 

 
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