Claims involving two or more years: how is effect given to the claim?
Paragraph 2(6) Schedule 1B sets out how effect is to be given to the claim. It reads
(6) Effect shall be given to the claim in relation to the later year, whether by repayment or set-off, or by an increase in the aggregate amount given by section 59B(1)(b) of this Act, or otherwise
So, that says we can give effect to the claim in one of four ways.
- By repayment
- by set-off
- by an increase in the aggregate amounts given by section 59B(1)(b) TMA 1970, or
Repayment - If the customer requests a repayment we are obliged to make it unless there are outstanding debts in which case we could set it off against those debts.
Set-off - We can cover outstanding debts as stated above or set it off against amounts becoming due and payable provided the customer agrees to that course of action.
An increase to aggregate amount given by section 59B(1)(b) - That section relates to the aggregate of the payments on account made under section 59A and any tax deducted at source in respect of the year in question.
There may well be instances when it is to the customer’s advantage to have his claim given effect to in this way as it may ease the burden of any interest charges.
As that is so, it is necessary to consider each option when considering how to give effect to the claim and to give effect in the way that is most beneficial to the customer unless he has specified how effect is to be given to his claim.
Otherwise - It is difficult to see what is meant by the word “otherwise” as a repayment, set-off or increase in the section 59B(1)(b) amounts should cover most situations. However, the inclusion of the word may enable us to give effect to the claim should a peculiar set of circumstances arise and the other methods of giving effect to the claim be impossible or against the wishes of the customer.
Paragraph 2(6) does not say that you give effect to the claim by adjusting the self-assessment for the later year.