Official error: circumstances giving rise to a statutory interest liability
Paragraph 7 of schedule 3 FA 2001 requires HMRC to pay interest where due to an error by HMRC a person has paid an amount of excise duty that was not due and that person is entitled to make a claim under section 137A CEMA1979 for repayment of the overpaid duty.
Paragraph 8 of schedule 3 FA 2001 requires HMRC to pay interest where, a person pays an amount by way of excise duty and, that person is entitled to obtain an amount by way of repayment, remission, rebate or drawback in respect of that duty, and due to an error by HMRC that person fails to claim the amount when, apart from the error he would have done so.
Paragraph 9 of schedule 3 FA 2001 requires HMRC to pay interest where due to an error by HMRC authorisation of a repayment, remission, rebate or drawback is delayed and the undue delay provisions in paragraph 4 do not apply, see ESIM3200.
Paragraph 10 of schedule 3 FA 2001 requires HMRC to pay interest where due to an HMRC error a person is refused approval or authorisation and makes a claim for the overpaid excise duty under paragraph 1 of schedule 3 FA 2001.
A written claim for statutory interest is required in all of the above circumstances, see ESIM2300. A claim for interest may not be made under more than one relevant paragraph in respect of the same principal repayment claim
There is an important distinction between repayment claims and overpaid duty which determines the relevant paragraph of schedule 3 under which a claim for statutory interest will fall. For example:
- a person may have been wrongly denied a repayment of duty for which they have (or would have apart from an official error) made a claim, or
- a person may have wrongly denied rebate, remission or set off and as a result overpaid duty.