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HMRC internal manual

Self Assessment: the legal framework

Claims, Elections and Notices: introduction

There are some 500 different claims and elections in the Taxes Acts. Many of these claims and elections exist to provide taxpayers with some degree of choice (in addition to the right to make a claim) in determining a particular computational issue. For example, the choice to claim a particular treatment, or the choice to claim a particular portion of a relief in a particular period.

Under self assessment there is a comprehensive set of procedures for all claims and elections made, or required to be made, by individuals, partnerships, or companies under the Taxes Acts.

Wherever possible a claim or election must be included in a self assessment tax return (or an amendment to a tax return). In this way the taxpayer automatically notifies his or her chosen options by means of the entries in the tax return. Where the claim results in a repayment of tax the repayment will usually be made, subject only to the security checks which are an integral part of the repayment process. The return as a whole, including the claim, remains subject to the ‘check later’ regime.

Where it is not practicable to include the claim or election in a tax return the claim is, none the less, subject to the same type of ‘process now-check later’ regime that applies to tax returns.

This means that whichever way a claim or election is made it usually takes effect automatically, with, where appropriate (and subject only to security checks), a repayment of tax. But equally HMRC then have an automatic right to verify the validity and accuracy of the claim, election or notice within a specified time limit. In certain cases or areas of particular risk HMRC may exercise their right to verify the claim before any payment is made.

Terminology used in this chapter

Section 42(10), paragraph 1 of Schedule 1A

Unless otherwise stated the procedures for ‘claims’ in section 42 and Schedule 1A also apply to any ‘elections’ required under the Taxes Acts. In this chapter the term ‘claim’ is used as shorthand for ‘claims and elections’

Paragraph 1(1) Schedule 1B

The procedure for claims for relief involving 2 or more years in Schedule 1B also applies to elections and notices.