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HMRC internal manual

Self Assessment Claims Manual

What the person can claim: Contract settlements

A person may be able to claim overpayment relief if they find that the tax liabilities that were covered by a contract settlement, see EM6001, were less than agreed.

Any claim for overpayment relief must be made by the person who is liable to pay under the contract settlement, whether or not this was the person whose tax liability was covered by the agreement (referred to on this page as “the taxpayer”).


Following a compliance check North Ltd agrees that some of its P11D returns were incorrect in respect of employee car benefits. The company agrees to pay any additional tax liabilities on behalf of the employees as part of a contract settlement.

After the contract settlement is agreed, North Ltd finds that, due to an arithmetic error, the additional tax liabilities were over-stated. Provided the other conditions for an overpayment relief claim are met, North Ltd can claim overpayment relief for the overpaid amount.

If someone other than the taxpayer claims overpayment relief in such circumstances, the rules regarding cases in which relief is excluded, see SACM12065+, are modified:

  • Cases B and C - SACM12080 and SACM12085 - do not apply unless the claimant, rather than the taxpayer, has other formal means of recovering the overpayment.
  • Cases D, E and F - SACM12090, SACM12095 and SACM12100 - apply whether the appeal or the proceedings concerned the taxpayer or the claimant.

The rules regarding discovery assessments and amendments, see SACM12165, apply whether the claim is made by the taxpayer or someone else. HMRC may set any repayment against the taxpayer’s other liabilities, whether or not they are the claimant.

Para 8 Schedule 1AB TMA 1970

Para 51G Schedule 18 FA 1998