HMRC SDLT: SDLTM54100 – Overpayment relief: Exclusions

Overpayment Relief: Exclusions

This section of the HMRC internal manual outlines the exclusions related to overpayment relief. Overpayment relief allows taxpayers to claim a refund for overpaid taxes, but certain conditions and exclusions apply. Key principles include:

• Eligibility criteria for claiming overpayment relief.
• Specific exclusions that prevent a claim from being valid.
• Time limits within which claims must be made.
• Documentation and evidence required to support a claim.

Understanding Overpayment Relief: Exclusions

Overpayment relief is a process that allows individuals and businesses to recover money they have overpaid in specific taxation scenarios. However, there are certain circumstances where a claim for overpayment relief cannot be made. These circumstances are known as exclusions and are grouped into different cases.

What is Overpayment Relief?

Overpayment relief applies when someone has paid more tax than they were legally required to. This can happen due to errors or misunderstandings in tax calculations or payments. The relief allows for the excess amount to be reclaimed, helping to ensure fairness in the tax system.

Exclusions from Overpayment Relief

If any of the following cases apply, then a claim for overpayment relief cannot be processed:

Case A: Mistakes in Claims or Elections

– If the overpayment relief arises from a mistake related to a claim or election, this case applies.
– Example: If a person mistakenly selected a tax rate that was higher than what they should have chosen, resulting in overpayment, they might not qualify for relief under this case.

Case B: Correction by Other Means

– If the individual can fix the overpayment or over-assessment using alternative methods, then relief cannot be claimed.
– Example: If someone incorrectly reported their taxable income and later adjusted their tax return to correct the error, they would not be able to claim overpayment relief.

Case C: Knowledge of Relief at the Time

– If at the time the individual was aware, or should have been aware, that they could get relief through other means, relief cannot be claimed.
– Example: If a tax payer could have claimed relief when they first realised their payment was too high but chose not to, they would be excluded from making a claim later on.

Case D: Previous Consideration by Courts or HMRC

– If a court or tribunal has already looked at the reasons behind the overpayment relief claim, it cannot be claimed again.
– This also includes cases where HMRC has already reviewed the claim and reached an agreement in the past.
– Example: If an individual previously submitted a claim to a court which was rejected, they cannot submit a new claim based on the same grounds.

Case E: Awareness Before Appeal

– If the person knew or should have known the reasons for their overpayment relief claim when they could have appealed to a court or tribunal, they are excluded from making a later claim.
– Example: If an individual discovered an error in their tax calculations prior to a court deadline but did not act on it, they would not qualify for relief after missing the opportunity to appeal.

Case F: Enforcement Proceedings by HMRC

– If HMRC has initiated legal action to recover the amount that is subject to the overpayment relief claim, then relief cannot be claimed.
– Example: If HMRC starts proceedings to collect unpaid taxes from an individual, any claim linked to that amount will not be allowed.

Case G: Amounts Under Prevailing Practice

– This case applies to amounts that were properly understood to be owed according to standard practice when the tax liability was calculated.
– Example: If an individual paid taxes based on general consensus around tax liabilities during a specific period, this will not come under overpayment relief if there is no error.

Key Points to Remember

– The exclusions highlight situations where overpayment relief claims cannot be made.
– Each case is based on specific circumstances that significantly affect eligibility.
– It’s important to identify your eligibility for overpayment relief early in the process, especially if you suspect you have overpaid.

Next Steps for Taxpayers

Understanding these exclusions is crucial for anyone considering a claim for overpayment relief. Here are some steps you can take:

– Check previous communications with HMRC or any legal proceedings you may have been involved in.
– Review past tax returns and claims to identify whether any of the exclusions apply to your situation.
– Seek professional advice if you’re unsure about your eligibility for relief or how to address a potential overpayment.

By being aware of these exclusions and understanding your situation, you can approach overpayment relief with better clarity and potentially avoid any pitfalls in the process. If you believe you may be eligible for overpayment relief but are unsure of the exclusions that apply, it may be beneficial to consult with a tax advisor or specialist for guidance tailored to your circumstances.

Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: SDLTM54100 – Overpayment relief: Exclusions

View all HMRC SDLT Guidance Pages Here