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HMRC internal manual

Excise Statutory Interest Manual

Undue delay: the applicable period - periods to ignore

ESIM3400 explains that HMRC can deduct time from the applicable period in respect of delays in authorising claims for repayment or drawback that were beyond their control.

In effect this means that HMRC can ignore periods where the claimant has been uncooperative by:

  • Failing to respond to enquiries within a reasonable time; or
  • Failing to provide requested information; or
  • Claiming something they are not entitled to,

and in doing so delayed authorisation of the repayment or drawback claim.

Enquiry time starts with the day HMRC request the taxpayer to provide information relevant to the matter to be determined and ends when a complete answer to their request to enable authorisation of the claim has been received. It is important to be able to demonstrate that the enquiry time has been calculated fairly and reasonably. An accurate audit trail must therefore be kept both for assurance purposes and in the event of an appeal.

If after allowing a reasonable amount of enquiry time it still takes more than 30 days to authorise a claim, then payment of statutory interest becomes due.

Paragraph 6 to schedule 3 FA2001