This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Self Assessment Claims Manual

Overpayment relief: Overview

Throughout this manual legislative references are to the Taxes Management Act 1970 (TMA70), unless otherwise stated.

A person can claim overpayment relief to recover overpaid income tax, CGT, Class 4 NIC or corporation tax or to reduce an excessive assessment.

Overpayment relief applies from 1 April 2010 for all tax years.

From 31 August 2010 a person can claim overpayment relief to recover overpaid bank payroll tax or to reduce an excessive assessment.

This includes amounts paid under a contract settlement.

This guidance covers both overpayments and excessive assessments. It deals specifically with income tax and CGT but also covers CT and bank payroll tax unless otherwise indicated.

The rules for overpayment relief are intended to

  • give a single route for persons to recover overpayments
  • bring the claims process into line with self-assessment claims, and
  • align time limits with those for other claims.

The legislation

Section 100 and Schedule 52 of FA 2009 introduced new legislation for claiming overpayment relief at

  • Schedule 1AB for overpaid income tax and CGT
  • Paragraphs 51A-G of Schedule 18 FA 1998 for overpaid corporation tax
  • Paragraph 31 of Schedule 1 FA 2010 applies the overpayment provisions to bank payroll tax with effect from 31 August 2010. Note: From 31 Aug 2014, with respect to bank payroll tax, an overpayment relief claim cannot be made.

Old error or mistake relief

Overpayment relief replaces the old error or mistake rules for individuals, partnerships and companies. From 1 April 2010, it is not possible to make a claim for the old error or mistake relief for any period. If, exceptionally, you need to refer to the old guidance for error or mistake relief, see SACMApp1.

If a person claimed error or mistake relief (for individuals and partnerships) or mistake relief (for companies) before 1 April 2010, we deal with their claims under the old rules, see SACM12200, and they cannot subsequently claim overpayment relief in respect of the same mistake.

If a person meets all the conditions for overpayment relief, we will not deny the relief just because they might have been able to claim under the old rules but did not.

Format of overpayment relief claims

The claim must be in the correct form and must state the amount that the person believes they have overpaid.

The person applying for overpayment relief must make a claim to HMRC for the repayment or discharge of the amount of tax which they believe they should not have paid, or should not be due. Any existing self-assessment should be left unchanged.

Time limits

The person must make the overpayment relief claim within four years of the end of the relevant tax year or accounting period, see SACM12155 for further information.

There are transitional rules giving a longer time limit for income tax SA returns for the years 2004-5 and 2005-6, see SACM12180.

Late claims

A taxpayer cannot appeal HMRC’s refusal to accept a late claim see, SACM10030 to overpayment relief, see SACM10030. The only challenge available to the taxpayer is Judicial Review, see ARTG12000.

Enquiries

Overpayment relief claims are stand- alone claims. Therefore enquiries into overpayment relief claims are made under Sch 1A Para 5.

Exclusions

There are specific situations where overpayment relief is not available. These exclusions are listed in the legislation, at

  • Sch 1AB Para 2 for income tax
  • Sch 18 Para 51A FA 1998 for corporation tax

Guidance on these exclusions can be found at SACM12070 onwards.

As far as possible, disputes relating to overpayment claims are dealt with through the tribunal rather than by claims directly to the High Court.