House of Commons portcullis
House of Commons
Session 2008 - 09
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 2 — Corporation tax

383

 

      (2)  

“Relevant claim” means a claim within paragraph 3(2)(a) of Schedule 1AB to

TMA 1970 that—

(a)   

is made before 1 April 2012 by a person other than a company, and

(b)   

satisfies sub-paragraph (3).

      (3)  

A claim satisfies this sub-paragraph if notice requiring the return (or, if more

5

than one, the first return) mentioned in paragraph 3(2)(a) of Schedule 1AB

to TMA 1970 was not given within one year of the end of the tax year to

which the return relates.

Saving for petroleum revenue tax

11         

The amendments of TMA 1970 made by this Part of this Schedule do not

10

have effect for the purposes of that Act as applied by paragraph 1 of

Schedule 2 to OTA 1975 (management and collection of petroleum revenue

tax).

Part 2

Corporation tax

15

Claims for recovery of overpaid tax etc

12         

Schedule 18 to FA 1998 (company tax returns, assessments and related

matters) is amended as follows.

13         

For paragraph 51 (and the heading before that paragraph) substitute—

“Claim for relief for overpaid tax etc

20

51    (1)  

This paragraph applies where—

(a)   

a person has paid an amount by way of tax but believes

that the tax was not due, or

(b)   

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

way of tax, or there has been a determination or direction

25

to that effect, but the person believes that the tax is not due.

      (2)  

The person may make a claim to the Commissioners for Her

Majesty’s Revenue and Customs for repayment or discharge of the

amount.

      (3)  

Paragraph 51A makes provision about cases in which the

30

Commissioners for Her Majesty’s Revenue and Customs are not

liable to give effect to a claim under this paragraph.

      (4)  

The following make further provision about making and giving

effect to claims under this paragraph—

(a)   

paragraphs 51B to 51F and Part 7 of this Schedule, and

35

(b)   

Schedule 1A to the Taxes Management Act 1970 (which is

applied by that Part).

      (5)  

Paragraph 51G makes provision about the application of this

paragraph and paragraphs 51A to 51F to amounts paid under

contract settlements.

40

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 2 — Corporation tax

384

 

      (6)  

The Commissioners for Her Majesty’s Revenue and Customs 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 to the Taxes

Management Act 1970 (following a claim under this

5

paragraph), or

(b)   

by or under another provision of the Corporation Tax Acts.

      (7)  

For the purposes of this paragraph and paragraphs 51A to 51G, an

amount paid by one person on behalf of another is treated as paid

by the other person.

10

Cases in which Commissioners not liable to give effect to a claim

51A   (1)  

The Commissioners for Her Majesty’s Revenue and Customs are

not liable to give effect to a claim under paragraph 51 if or to the

extent that the claim falls within a case described in this paragraph

(see also paragraph 51C(5)).

15

      (2)  

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

by reason of—

(a)   

a mistake in a claim, election or a notice,

(b)   

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

or give, a claim, election or notice,

20

(c)   

a mistake in allocating expenditure to a pool for the

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

25

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

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 Corporation Tax Acts.

      (4)  

Case C is where the claimant—

30

(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—

35

(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

40

amount that is treated as having been determined by a

tribunal (by virtue of section 54 of the Taxes Management

Act 1970 (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

45

following—

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 2 — Corporation tax

385

 

(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

having been so determined),

5

(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.

      (7)  

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

10

paid—

(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

15

and Her Majesty’s Revenue and Customs settling such

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

20

corporation tax, and

(b)   

liability was calculated in accordance with the practice

generally prevailing at the time.

Making a claim

51B   (1)  

A claim under paragraph 51 may not be made more than 4 years

25

after the end of the relevant accounting period.

      (2)  

In relation to a claim made in reliance on paragraph 51(1)(a), the

relevant accounting period is—

(a)   

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

reason of a mistake in a company tax return or returns, the

30

accounting period to which the return (or, if more than

one, the first return) relates, and

(b)   

otherwise, the accounting period in respect of which the

amount was paid.

      (3)  

In relation to a claim made in reliance on paragraph 51(1)(b), the

35

relevant accounting period is the accounting period to which the

assessment, determination or direction relates.

      (4)  

A claim under paragraph 51 may not be made by being included

in a company tax return.

The claimant: one person accountable for amounts payable by another

40

51C   (1)  

Sub-paragraph (2) applies where a person (“P”) is accountable to

the Commissioners for Her Majesty’s Revenue and Customs

under a relevant enactment for an amount that has been or is to be

set off against a liability of another person (“T”) under a relevant

enactment.

45

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 2 — Corporation tax

386

 

      (2)  

A claim under paragraph 51 in respect of the amount may be made

only by T.

      (3)  

Sub-paragraph (4) applies where—

(a)   

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

paragraph (1) in the belief that P was accountable to the

5

Commissioners for the amount under a relevant

enactment, but

(b)   

P was not so accountable.

      (4)  

A claim under paragraph 51 in respect of the amount may be made

only by P.

10

      (5)  

The Commissioners for her Majesty’s Revenue and Customs are

not liable to give effect to a claim under sub-paragraph (4) if or to

the extent that the amount has been repaid to T or set against

amounts payable to the Commissioners by T.

      (6)  

“Relevant enactment” means—

15

(a)   

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

under that Chapter (construction industry scheme), or

(b)   

any other provision of or made under the Taxes Acts.

The claimant: partnerships

51D   (1)  

This paragraph applies where—

20

(a)   

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

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

25

partnership return.

      (2)  

A claim under paragraph 51 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.

30

      (3)  

In relation to such a claim, references in paragraphs 51A to 51F to

the 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

35

return was made, or

(b)   

the personal representative of such a person.

Assessment of claimant in connection with claim

51E   (1)  

This paragraph applies where—

(a)   

a claim is made under paragraph 51,

40

(b)   

the grounds for giving effect to the claim also provide

grounds for a discovery assessment or discovery

determination on the claimant in respect of any accounting

period, and

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 2 — Corporation tax

387

 

(c)   

such an assessment or determination could be made but

for a relevant restriction.

      (2)  

The following are relevant restrictions—

(a)   

the restrictions in paragraphs 42 to 45, and

(b)   

the expiry of a time limit for making a discovery

5

assessment or discovery determination.

      (3)  

Where this paragraph applies—

(a)   

the relevant restrictions are to be disregarded, and

(b)   

the discovery assessment or discovery determination is not

out of time if it is made before the final determination of

10

the claim.

      (4)  

A claim is not finally determined until it, or the amount to which

it relates, can no longer be varied (whether on appeal or

otherwise).

Amendment of partnership return etc in connection with claim

15

51F   (1)  

This paragraph applies where—

(a)   

a claim is made under paragraph 51,

(b)   

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

trade, profession or business in partnership,

(c)   

the grounds for giving effect to the claim also provide

20

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

Management Act 1970 (discovery of loss of tax from

partnership), a return made by the partnership or any of

the partners in respect of any period, and

(d)   

such an amendment could be made but for a relevant

25

restriction.

      (2)  

The following are relevant restrictions—

(a)   

the conditions in section 30B(4) to (6) of the Taxes

Management Act 1970, and

(b)   

the expiry of a time limit for making an assessment under

30

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.

35

      (4)  

A claim is not finally determined until it, or the amount to which

it relates, can no longer be varied (whether on appeal or

otherwise).

Contract settlements

51G   (1)  

In paragraph 51(1)(a), the reference to an amount paid by a

40

company by way of tax includes an amount paid by a person

under a contract settlement in connection with tax believed to be

due.

 
 

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 2 — Corporation tax

388

 

      (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 paragraph 51 in respect of that

amount—

5

(a)   

the references to the claimant in paragraph 51A(5) to (7)

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

taxpayer,

(b)   

the reference to the claimant in paragraph 51A(8) (Case G)

has effect as if it were a reference to the taxpayer,

10

(c)   

the references to the claimant in paragraphs 51E(1)(b) and

51F(1)(b) have effect as if they were references to the

taxpayer, and

(d)   

references to tax in Schedule 1A to the Taxes Management

Act 1970 (as it applies to a claim under this Part of this

15

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 discovery determination on the

taxpayer in respect of any chargeable period.

20

      (5)  

The Commissioners for Her Majesty’s Revenue and Customs 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 for Her Majesty’s Revenue

25

and Customs and the taxpayer are discharged to the extent of any

set-off under sub-paragraph (5).

      (7)  

“Contract settlement” means an agreement made in connection

with any person’s liability to make a payment to the

Commissioners for Her Majesty’s Revenue and Customs under or

30

by virtue of an enactment.”

14         

Accordingly, in the heading of Part 6, at the beginning insert “Overpaid

tax,”.

15    (1)  

Paragraph 62 (consequential claims etc that may be made) is amended as

follows.

35

      (2)  

After sub-paragraph (1) insert—

   “(1A)  

This paragraph applies to a claim under paragraph 51 relating to

the accounting period in respect of which the amendment or

assessment is made.”

      (3)  

In sub-paragraph (2), for “a claim” substitute “any other claim”.

40

16         

In paragraph 88 (conclusiveness of amounts stated in return), insert at the

end—

    “(8)  

Nothing in this paragraph affects a power of the company making

the return to make a claim under paragraph 51 (claim for relief for

overpaid tax).”

45

 
 

Finance Bill
Schedule 53 — Late payment interest
Part 1 — Special provision: amount carrying late payment interest

389

 

Consequential amendment

17         

In Schedule 1A to TMA 1970 (claims etc not included in returns), in

paragraph 1, in the definition of “partnership claim”, after “Act” insert “or

paragraph 51D of Schedule 18 to the Finance Act 1998 (claims for overpaid

corporation tax)”.

5

Schedule 53

Section 100

 

Late payment interest

Part 1

Special provision: amount carrying late payment interest

Payments on account and balancing payment

10

1     (1)  

This paragraph applies where as regards a tax year—

(a)   

payments on account are payable by a person (“P”),

(b)   

P makes a claim under section 59A(3) or (4) of TMA 1970 (reduction

of payments on account) in respect of those amounts, and

(c)   

a balancing payment becomes payable by P.

15

      (2)  

Late payment interest is to be calculated as if each of the payments on

account had been equal to the lesser of the following amounts—

(a)   

the aggregate of that payment on account and 50% of the balancing

payment, and

(b)   

the amount which would have been payable as a payment on

20

account if the claim under section 59A(3) or (4) had not been made.

      (3)  

In determining for the purposes of this paragraph what amount (if any) is

payable by P as a balancing payment—

(a)   

it is to be assumed that both of the payments on account have been

paid,

25

(b)   

no account is to be taken of any amount which has been paid on

account otherwise than under section 59A(2) of TMA 1970, and

(c)   

no account is to be taken of any amount which is payable by way of

capital gains tax.

      (4)  

In this paragraph—

30

“balancing payment” means an amount payable—

(a)   

in accordance with section 59B(3), (4) or (5) of TMA 1970, or

(b)   

in accordance with section 59B(6) of that Act in respect of

income tax assessed under section 29 of that Act;

“payment on account” means an amount payable in accordance with

35

section 59A(2) of TMA 1970.

Payments on account and overpayment

2     (1)  

This paragraph applies where as regards any person (“P”) and a tax year—

(a)   

payments on account become payable by P, and

(b)   

an overpayment becomes repayable to P.

40

 
 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2009
Revised 30 April 2009