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HMRC internal manual

Self Assessment Claims Manual

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HM Revenue & Customs
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Overpayment relief: Exclusions: Cases G and H - Practice generally prevailing

There are exceptions relating to the practice generally prevailing, see below, for

  • capital gains and income tax other than PAYE income - see Case G below
  • PAYE income - see Case H below.

Case G - Capital gains and income tax other than PAYE income

Overpayment relief is not due if the claim relates to a mistake in an SA return or other tax calculation and the tax liability was calculated in accordance with the practice generally prevailing, see below, at that time, except where the claim relates to PAYE income.

Case H - PAYE income

Overpayment relief is not due in respect of PAYE income if the tax liability in respect of that income was calculated in accordance with the practice generally prevailing, see below, 12 months after the end of the tax year.

Practice generally prevailing

Whether there was a “practice generally prevailing” is a question of fact (Rose Smith 17 TC 586).

In HMRC v Household Estate Agents Ltd Henderson J. stated

‘Without attempting to give an exhaustive definition, it seems to me that a practice may be so described only if it is relatively long-established, readily ascertainable by interested parties, and accepted by HMRC and taxpayers’ advisers alike: compare the decision of the Special Commissioners (Dr A N Brice and Mr John Walters QC) in Rafferty v HMRC.’

In relation to overpayment relief, the onus is on HMRC in any appeal hearing to demonstrate that there was a practice generally prevailing. You may need to refer, among other things, to our published guidance, advice from HMRC technical specialists, reported cases and external comment as evidence of a practice generally prevailing.

A practice need not have been universally followed. But where a tribunal or court decides that a practice is wrong you should take it to have ceased to be a generally prevailing practice at that point even if the decision is subject to appeal.

Tax paid contrary to EU law

Case G and H do not apply if tax has been paid contrary to EU law.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Para 2(8) and (9) Schedule 1AB TMA 1970

Para 51A(8) Schedule 18 FA 1998