HMRC SDLT: SDLTM54120 – Overpayment relief: Exclusions: Case B mistake concerning a relief or election

Principles and Concepts of Overpayment Relief Exclusions

This section of the HMRC internal manual discusses the principles and concepts related to overpayment relief exclusions, specifically focusing on Case B, which involves mistakes concerning a relief or election. Key points include:

• Definition of overpayment relief and its purpose.
• Explanation of Case B exclusions related to mistakes in relief or election.
• Criteria for determining eligibility for overpayment relief.
• Procedures for addressing and rectifying mistakes in claims.

SDLTM54120 – Overpayment Relief: Exclusions: Case B Mistake Concerning a Relief or Election

Understanding Overpayment Relief

Overpayment relief is a process that allows individuals or businesses to get back tax they have overpaid. This is particularly relevant in the context of stamp duty land tax (SDLT). However, there are specific scenarios where this relief cannot be claimed, specifically in the case of a mistake related to elections or claims for relief.

What is Case B?

Case B refers to a situation where a person might have mistakenly made a claim for relief or an election in relation to their stamp duty land tax. This could occur if someone misunderstands the eligibility criteria for a tax relief or makes an error while filling out their return. It is essential to clarify that not all mistakes can be rectified through overpayment relief.

To illustrate, consider a buyer of property who thinks they are eligible for a first-time buyer relief, but they don’t meet all the necessary conditions. If this buyer submits their application believing they qualify and later find out they do not, this situation would fall under Case B.

Specific Exclusions from Overpayment Relief

In the context of Case B, there are important exclusions to understand:

– Formal Recovery Options: If there are other formal methods available for recovering a tax overpayment or for correcting a wrong assessment, these must be used instead of seeking overpayment relief.
– For example, if a person has submitted a transaction return that can be amended, they are required to amend that return rather than claiming overpayment relief.

– Types of Mistakes: Not all mistakes will qualify for relief. The mistakes recognized as Case B involve specific claims for relief or elections that have been incorrectly submitted.
– An example might be someone who incorrectly claims multiple reliefs on a single property purchase when such claims are not allowable.

– Intent and Knowledge: If the taxpayer understood the rules or had the means to know about the mistake and still made an incorrect claim, they may not be eligible for any sort of relief.
– For instance, if a taxpayer has access to guidance materials about SDLT and knowingly opts for a relief they aren’t eligible for, they cannot claim relief later on.

What Should You Do If You Believe You’ve Made a Mistake?

If you suspect that you have made a mistake concerning a relief or election, you should consider taking the following steps:

– Review Your Claim: Look back at your original tax submission and consider whether you were eligible for the claim you made.

– Consult Guidance: Use the HMRC resources available online to clarify your understanding of the eligibility requirements for the relief you are interested in.

– Correct Your Return: If it is determined that you made an error and you have a formal avenue available to amend your returns, pursue this option first.
– Contact HMRC or check their website on how to amend your transaction return for more detailed instructions.

– Seek Professional Help: If you find the process confusing or if high amounts are involved, consider seeking advice from a tax professional who can guide you through the process.

Formal Means of Recovering Overpayments

There are formal ways to address an overpayment of tax, and you should be familiar with these before considering overpayment relief. Some of these methods include:

– Amendment of a Transaction Return: If you realise that you have overpaid or made an error, you can amend your original submission.
– For instance, if you reported the purchase price incorrectly which led to paying too high of SDLT, you can amend that price to a correct amount before considering overpayment relief.

– Relief Claims: If your situation allows, submitting a claim for the intended relief while correcting any specific errors would be preferable to filing for overpayment relief.
– This ensures that the tax is assessed correctly right from the start instead of relying on a later claim for the amount overpaid.

Examples of Situations Where Overpayment Relief Cannot Be Claimed

Below are some practical examples to highlight instances where individuals cannot claim overpayment relief under Case B:

– Incorrect Relief Claim: If you purchase a second home believing you qualify for relief given your circumstances (e.g., you’re moving to a new primary residence), but you were not eligible, you will not be able to claim relief after the fact.

– Filing Errors: If a taxpayer misfiles their paperwork, such as accidentally selecting the wrong box when filing for relief on their SDLT return, they may not qualify for overpayment relief.

– Formal Returns that Can Be Adjusted: If a buyer has accidentally included the value of furniture in the purchase price, they should amend the transaction return to get an accurate picture of the SDLT owed rather than attempting to claim back an overpayment later.

Key Principles to Remember

When considering overpayment relief, keep these essential principles in mind:

– Act Quickly: The sooner you identify a mistake and act to correct it, the easier it may be to resolve the issue.

– Know Your Options: Being aware of the correct procedures for amending a return or claiming reliefs will guide you through processing your SDLT obligations correctly.

– Understand Exclusions: Being clear on what scenarios disqualify you from receiving overpayment relief will help you avoid confusion and further errors in managing your tax responsibilities.

– Use Available Resources: HMRC provides guidance and resources that can assist in understanding the options and requirements for SDLT claims, so don’t hesitate to utilize these materials.

In situations involving stamp duty land tax, comprehending the exclusions related to Case B is vital. By following the formal methods of addressing overpayments and resolving claims through appropriate routes, you can safeguard yourself from unnecessary losses or complications regarding SDLT.

Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: SDLTM54120 – Overpayment relief: Exclusions: Case B mistake concerning a relief or election

View all HMRC SDLT Guidance Pages Here