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HMRC internal manual

Self Assessment Claims Manual

Appendix 1: Old Error or Mistake Relief: Practice Generally Prevailing

From 1 April 2010, it is not possible to make a claim for the old error or mistake relief for any period. The relief is replaced by overpayment relief, see SACM12000+. You will only need the guidance in SACM Appendix 1 if you are dealing with a claim made before 1 April 2010.

No relief shall be given

  • on the ground of an alleged error in the basis of computation of liability
  • if the return was made on the basis, or
  • in accordance with the practice generally prevailing

(that is, for taxpayers in the class affected by the point at issue) at the time when the return was made. TMA70/S33 (2) [pre-ITSA and CTSA], TMA70/S33 (2A)(a) (as amended by FA94), TMA70/S33A (5) and FA98/SCH18/PARA51 (3)(a).

It should be noted that the above provision applies to deny relief which would otherwise be available. That is, it is accepted that there has been an error or mistake in a return, but at the time the return was made the practice generally prevailing was to calculate liability in the erroneous way.

The question of whether there is a “practice generally prevailing” is not an easy one to answer, as there has to be a general acceptance of the practice by HMRC, taxpayers and agents throughout the UK. Consequently, knowledge of what is happening around the country on the particular point at issue is needed before a decision can be taken on this aspect.

A decision of the Courts given after the date of a return, which amends the previous generally prevailing practice, does not afford a title to the relief.

The practice adopted in a particular case is not in itself conclusive. It is the practice generally prevailing which is significant.

Where the Inspector’s reason for regarding an application as inadmissible is

  • that `the return was in fact made on the basis or
  • in accordance with the practice generally prevailing at the time when the return was made,’ and
  • he is unable to satisfy the taxpayer on that point,

the case should be submitted to Central Policy (Tax Administration Advice) in accordance with SACM20085.