© 2024 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Procedure.Tax
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C3: Time limits and late claims
Hard-edged time limits are a feature of self-assessment
"[50] Nor can I see any rational reason why Parliament would have wished to dispense altogether with the generally applicable time limit in paragraph 6(3), enabling taxpayers to make claims for repayment without any time limit, even decades later when memories may have faded and documents relating to the original land transaction may have been lost. There is nothing inconsistent in Parliament providing a right to reclaim tax paid as a safeguard for innocent taxpayers caught by the widely worded charge in section 44(4), but at the same time making that right subject to clear procedural rules, including time limits on the right to reclaim payment. It is of the essence of a self-assessment system that tax effects can be undone by administrative failure and merely meeting the substantive conditions for the grant of a relief is rarely enough to secure that a taxpayer receives the relief in question. Where the relief requires a claim, and the claim is not made in accordance with any procedural requirements, the taxpayer will not be given the relief.
[51] Moreover, hard-edged time limits are a common feature of the self-assessment scheme. Where they govern the availability of a relief, they have the inevitable potential to cause hardship. In the case of section 44(9), a balance between the competing objectives of preventing tax avoidance on the one hand, and relieving innocent transactions caught by section 44(4) on the other, was clearly intended by Parliament. Since the longer the period of substantial performance lasts without completion of the contract, the more likely it is the purchaser will have obtained benefits under the contract in a way that justifies maintaining the SDLT charge, it was rational to strike that balance with a time limit of 13 months for amending the return from the effective date of the transaction giving rise to substantial performance (in other words, 12 months after the filing date). This limits the scope for avoidance but is simple to operate (for both HMRC and taxpayers). I can see no good reason why the unambiguous, hard-edged time limit in paragraph 6(3) should yield to section 44(9) as Mr Thomas contended. The consequence of Mr Thomas' construction is to dispense with certainty and finality in the sound administration of SDLT. That would be a surprising result." (Candy v. HMRC [2022] EWCA Civ 1447, Simler, Arnold, Nugee LJJJ)
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Rejecting a claim as out of time not an enquiry​
"[40] In my judgment, in common with the view of the UT in Portland Gas, a rejection by HMRC of a claim on the grounds that it is out of time, by reference to no more than the claim itself and a calculation of the applicable time limit, does not involve any use by HMRC of their statutory powers to enquire into the claim nor does it constitute notice of an intention to do so. On the facts of this case, it is unnecessary to go further and consider what additional actions on the part of HMRC would constitute an enquiry. As earlier mentioned, HMRC does not accept that the UT was right in Portland Gas to hold that HMRC's subsequent actions did constitute an enquiry. I express no view on that question." (HMRC v. Raftopoulou [2018] EWCA Civ 818, David Richards and Arden LJJ)
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"[42] Having found that Mr Sikdar’s claims are out of time, it follows that this Tribunal has no jurisdiction to hear the appeal.
[43] This is clear from the case of Revenue and Customs Commissioners v Raftopoulou [2018] EWCA Civ 818 (Raftopoulou) in the Court of Appeal. It is a trite comment that this Tribunal is a creature of statute and that it has only the jurisdiction conferred on it by statute. Raftopoulou held that a decision by HMRC to refuse a claim for double taxation relief solely on the ground that the claim is out of time does not, of itself, give the taxpayer an appealable decision within the jurisdiction of this Tribunal. The proper remedy is judicial review." (Sikder v. HMRC [2023] UKFTT 362 (TC), Judge McKeever)
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"An attempt to claim, made after the time limit for making claims has expired, is not a claim in law.
But if
- the declaration on the claim form was signed, or
- the form was posted
on or before the day on which the time limit expired, then see INTM330740." (INTM330770)
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Basic time limit: 4 years
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"(1) Subject to any provision of the Taxes Acts prescribing a longer or shorter period, no claim for relief in respect of income tax or capital gains tax may be made more than 4 years after the end of the year of assessment to which it relates." (TMA 1970, s.43(1))
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"Subject to any provision prescribing a longer or shorter period, a claim for relief under any provision of the Corporation Tax Acts must be made within 4 years from the end of the accounting period to which it relates." (FA 1998, Sch 18, para 55)
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Claims that are not within the statute v. claims that HMRC are not liable to give effect to
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“[34] Thus, a claim that is made outside that period may be a claim in the ordinary sense of that word, but it cannot be a claim under Schedule 1AB, and thus cannot be a claim for the purpose of Schedule 1A. Absent anything which might deem a claim to have been made in time, and thus under Schedule 1AB, none of the provisions of Schedule 1A as to enquiries, closure notices and appeals can apply…
[35] The provisions of paragraph 3(1) of Schedule 1AB (and similar provisions in para 3(4) precluding claims from being made in a tax return) can be contrasted with provisions which exclude the liability of HMRC to give effect to a claim. Those provisions, found most particularly in paragraph 2 of Schedule 1AB, admit the existence of a claim under that Schedule, albeit one that cannot be given effect to, and such claims are within Schedule 1A. By contrast, paragraph 3 of Schedule 1AB does not provide that a claim is not to be given effect to if it is made late; it precludes the possibility of a claim at all if it is not made, and cannot be treated as having been made, in time.” (Raftopolou v HMRC [2015] UKUT 579 (TCC), §§34…35, Judges Berner and Raghavan)
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- CGT claim based on contingent liability: time limit runs when all conditions for claim satisfied
"The test whether a claim can be made under S49(2) is a factual one. If a contingent liability within S49(1)
- becomes enforceable, and
- is being, or has been enforced
a claim may be made for the adjustment required. The time limit in TMA70/S43 applies from the date when all of the conditions for making a claim are satisfied.
For example, a contract for the sale and purchase of shares is formed on 15/03/2019. The contract includes a warranty. After the purchaser has gone through the accounts, they identify an overstatement of sales. The purchaser makes a claim to the vendor under the warranty on 20/11/2019. The vendor disputes the warranty claim resulting in litigation. The claim and associated litigation is settled by the vendor and purchaser on 05/05/2023. The four year time limit for the vendor to make a claim under S49(2) runs from 05/05/2023 when all of the conditions for making the claim have been satisfied." (CG14805)
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Claims that could not have been made but for assessment
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"(2) A claim (including a supplementary claim) which could not have been allowed but for the making of an assessment to income tax or capital gains tax after the year of assessment to which the claim relates may be made at any time before the end of the year of assessment following that in which the assessment was made." (TMA 1970, s.43(2))
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Consequential income tax and CGT claims permitted following assessment
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Assessment not to make good loss of tax brought about carelessly or deliberately
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"(1) This section applies where—
(a) by virtue of section 29 of this Act an assessment to income tax or capital gains tax is made on any person for a year of assessment, and
(b) the assessment is not made for the purpose of making good to the Crown any loss of tax brought about carelessly or deliberately by that person or by someone acting on behalf of that person.
(2) Without prejudice to section 43(2) above but subject to section 43B below, where this section applies—
(a) any relevant claim, election, application or notice which could have been made or given within the time allowed by the Taxes Acts may be made or given at any time within one year from the end of the year of assessment in which the assessment is made, and
(b) any relevant claim, election, application or notice previously made or given may at any such time be revoked or varied—
(i) in the same manner as it was made or given, and
(ii) by or with the consent of the same person or persons who made, gave or consented to it (or, in the case of any such person who has died, by or with the consent of his personal representatives),
except where by virtue of any enactment it is irrevocable." (TMA 1970, s.43A(1) - (2))
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Meaning of relevant claim and election
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"(2B) For the purposes of this section and section 43B below, a claim under Schedule 1AB is relevant in relation to an assessment for a year of assessment if it relates to that year of assessment.
(3) For the purposes of this section and section 43B below, any other claim, election, application or notice is relevant in relation to an assessment for a year of assessment if—
(a) it relates to that year of assessment or is made or given by reference to an event occurring in that year of assessment, and
(b) it or, as the case may be, its revocation or variation has or could have the effect of reducing any of the liabilities mentioned in subsection (4) below.
(4) The liabilities referred to in subsection (3) above are—
(a) the increased liability to tax resulting from the assessment,
(b) any other liability to tax of the person concerned for—
(i) the year of assessment to which the assessment relates, or
(ii) any year of assessment which follows that year of assessment and ends not later than one year after the end of the year of assessment in which the assessment is made." (TMA 1970, s.43A(2B) - (4))
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Excluded claims and elections
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"(2A) In subsection (2) above, “claim, election, application or notice” does not include an election under—
(a) any of sections 47 to 49 of ITA 2007 (tax reductions for married couples and civil partners: elections to transfer relief),
(aa) section 55C of ITA 2007 (election to transfer allowance to spouse or civil partner),
(b) …
(c) section 35(5) of the Taxation of Chargeable Gains Act 1992 (election for assets to be re-based to 1982)." (TMA 1970, s.43A(2A))
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Effect to be given to consequential claims
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"(5) Where a claim, election, application or notice is made, given, revoked or varied by virtue of subsection (2) above, all such adjustments shall be made, whether by way of discharge or repayment of tax or the making of assessments or otherwise, as are required to take account of the effect of the taking of that action on any person's liability to tax for any year of assessment." (TMA 1970, s.43A(5))
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But only to reduce the additional liability arising from the assessment
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"(3) In any case where—
(a) one or more relevant claims, elections, applications or notices are made, given, revoked or varied by virtue of the application of section 43A above in the case of an assessment, and
(b) the total of the reductions in liability to tax which, apart from this subsection, would result from the action mentioned in paragraph (a) above would exceed the additional liability to tax resulting from the assessment,
the excess shall not be available to reduce any liability to tax." (TMA 1970, s.43B(3))
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Apportioning any limitation
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"(4) Where subsection (3) above has the effect of limiting either the reduction in a person's liability to tax for more than one period or the reduction in the liability to tax of more than one person, the limited amount shall be apportioned between the periods or persons concerned—
(a) except where paragraph (b) below applies, in such manner as may be specified by the inspector by notice in writing to the person or persons concerned, or
(b) where the person concerned gives (or the persons concerned jointly give) notice in writing to the inspector within the relevant period, in such manner as may be specified in the notice given by the person or persons concerned.
(5) For the purposes of paragraph (b) of subsection (4) above the relevant period is the period of 30 days beginning with the day on which notice under paragraph (a) of that subsection is given to the person concerned or, where more than one person is concerned, the latest date on which such notice is given to any of them." (TMA 1970, s.43B(4) - (5))
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Appealing decisions in respect of consequential claims
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"(6) The provisions of this Act relating to appeals against decisions on claims shall apply with any necessary modifications to a decision on the revocation or variation of a claim by virtue of subsection (2) above." (TMA 1970, s.43A(6))
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Assessment to make good loss of tax brought about carelessly or deliberately
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"(3) If the person on whom the assessment is made so requires, in determining the amount of the tax to be charged for any chargeable period in any assessment made in a case mentioned in subsection (1) or (1A) above, effect shall be given to any relief or allowance to which he would have been entitled for that chargeable period on a claim or application made within the time allowed by the Taxes Acts.
(3A) In subsection (3) above, “claim or application” does not include an election under any of sections 47 to 49 of ITA 2007 (tax reductions for married couples and civil partners: elections to transfer relief)." (TMA 1970, s.36(3) - (3A))
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"Effect shall be given"
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“We find it difficult to see how a claim for overpayment relief under Schedule 1AB can be given effect to in making the s 29 assessment (although we do not read s 36(3) as requiring that the claim be made before the making of the assessment – that would be perverse). It may be given perhaps by setting the tax overpaid (the tax on that amount of dividends which equals the car benefit in that year) against the tax charged by the assessment.” (Dugan v. HMRC [2016] UKFTT 618 (TC), §146).
Assessments relating to offshore matters or offshore transfers
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"(11) Section 36(2) to (3A) applies for the purposes of this section (as if references to section 36(1) or (1A) were to subsection (1) of this section)" (TMA 1970, s.36A(9))
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Claim not required to be made before assessment
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“…although we do not read s 36(3) as requiring that the claim be made before the making of the assessment – that would be perverse.” (Dugan v. HMRC [2016] UKFTT 618 (TC), §146).
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Consequential claims affecting others (income tax or CGT)
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Claim etc affecting the liability of another requires written consent
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"(1) If the effect of the exercise by any person of a power conferred by section 43A(2) above—
(a) to make or give a claim, election, application or notice, or
(b) to revoke or vary a claim, election, application or notice previously made or given,
would be to alter the liability to tax of another person, that power may not be exercised except with the consent in writing of that other person or, where he has died, his personal representatives." (TMA 1970, s.43B(1))
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No further consequential claim if assessment is the result of a previous consequential claim
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"(2) Where—
(a) a power conferred by subsection (2) of section 43A above is exercised in consequence of an assessment made on a person, and
(b) the exercise of the power increases the liability to tax of another person,
that section shall not apply by reason of any assessment made because of that increased liability." (TMA 1970, s.43B(2))
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Consequential income tax and CGT claims following amendment of return
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“But by s 43C(1) and (2) [TMA 1970] consequential claims may be made in an amendment case. Again the relevant provision depends on whether the amendment was made in a case involving a loss of tax brought about carelessly or not.” (Dugan v. HMRC [2016] UKFTT 618 (TC), §148).
Amendment to make good loss of tax brought about carelessly or deliberately
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"(1) Where—
(a) a return is amended under section 28A(2)(b), 28B(2)(b) or 28B(4), and
(b) the amendment is made for the purpose of making good to the Crown any loss of tax brought about carelessly or deliberately by the taxpayer or a person acting on his behalf,
sections 36(3) and 43(2) apply in relation to the amendment as they apply in relation to any assessment under section 29." (TMA 1970, s.43C(1))
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"(3) References to an assessment in sections 36(3), 43(2), 43A and 43B, as they apply by virtue of subsection (1) or (2) above, shall accordingly be read as references to the amendment of the return." (TMA 1970, s.43C(3))
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Amendment not to make good loss of tax brought about carelessly or deliberately
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"(2) Where—
(a) a return is amended under section 28A(2)(b), 28B(2)(b) or 28B(4), and
(b) the amendment is not made for the purpose mentioned in subsection (1)(b) above,
sections 43(2), 43A and 43B apply in relation to the amendment as they apply in relation to any assessment under section 29." (TMA 1970, s.43C(2))
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Consequential corporation tax claims following amendment or assessment: loss of tax not deliberate or careless
"(1) Paragraphs 62 to 64 have effect to allow certain claims, elections, applications and notices to be made or given, or if previously given to be revoked or varied, where—
(a) an amendment of a company tax return is made under paragraph 34(2A) (amendments of other returns required in consequence of partial or final closure notice) which has the effect of increasing the amount of tax payable by a company,
(b) a discovery assessment is made, or
(c) an assessment is made under paragraph 76 (recovery of excessive group relief or group relief for carried-forward losses." (FA 1998, Sch 18, para 61(1))
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"(1) A claim, election, application or notice to which this paragraph applies—
(a) may be made or given at any time within one year from the end of the relevant accounting period, or
(b) if previously made or given may at any such time be revoked or varied–
(i) in the same manner as it was made or given, and
(ii) by or with the consent of the same person or persons who made, gave or consented to it (or, if a person has died, by or with the consent of his personal representatives),
unless, by virtue of any enactment, it is irrevocable.
(1A) This paragraph applies to a claim under paragraph 51 relating to the accounting period in respect of which the amendment or assessment is made.
(2) This paragraph applies to any other claim, election, application or notice—
(a) relating to the accounting period in respect of which the amendment or assessment is made, or
(b) made or given by reference to an event occurring in that period,
whose making, giving, revocation or variation has or could have the effect of reducing a relevant liability of the company." (FA 1998, Sch 18, para 62(1) - (2))
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Unless loss of tax brought about carelessly or deliberately
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"(2) Paragraphs 62 to 64 do not apply in relation to an assessment made in a case involving a loss of tax brought about carelessly or deliberately by—
(a) the company, or
(b) a person acting on behalf of the company, or
(c) a person who was a partner of the company at the relevant time.
In such a case more limited provision is made by paragraph 65." (FA 1998, Sch 18, para 61(2))
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Relevant accounting period
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"(3) In paragraphs 62 to 64 “the relevant accounting period”, in relation to the time limit for making a consequential claim, election, application or notice, means—
(a) in relation to an amendment of a company tax return under paragraph 34(2A), the accounting period in which the partial or final closure notice was issued;
(b) in relation to an assessment, the accounting period in which the assessment was made." (FA 1998, Sch 18, para 61(3))
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Relevant liabilities
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"(3) The following are relevant liabilities of the company for this purpose—
(a) the increased liability to tax resulting from the amendment or assessment;
(b) any other liability to tax of the company–
(i) for the accounting period to which the amendment or assessment relates, or
(ii) for any subsequent accounting period ending not later than one year after the end of the relevant accounting period." (FA 1998, Sch 18, para 62(3))
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Effect to be given
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"(4) Where a claim, election, application or notice is made, given, revoked or varied by virtue of this paragraph, all such adjustments shall be made, whether by way of discharge or repayment of tax or the making of amendments, assessments or otherwise, as are required to take account of the effect of the taking of that action on any person's liability to tax for any chargeable period." (FA 1998, Sch 18, para 62(4))
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But only to reduce the additional liability arising from the assessment
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"(1) If in any case—
(a) one or more claims, elections, applications or notices are made, given, revoked or varied under paragraph 62 in consequence of an amendment or assessment, and
(b) the total of the reductions in liability to tax resulting from that action would exceed the additional liability to tax resulting from the amendment or assessment,
the excess is not available to reduce any liability to tax." (FA 1998, Sch 18, para 64(1))
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Apportioning any limitation
"(2) Where sub-paragraph (1) has the effect of limiting either—
(a) the reduction in a person's liability to tax for more than one period, or
(b) the reduction in the liability to tax of more than one person,
the limited amount shall be apportioned between the periods or persons concerned.
(3) The apportionment shall be made in such manner as an officer of Revenue and Customs may specify by notice in writing to the person or persons concerned, unless notice is given under the following provision.
(4) If the person concerned gives (or the persons concerned jointly give) notice in writing to an officer of Revenue and Customs within the period of 30 days beginning with—
(a) the day on which notice under sub-paragraph (3) is given to the person concerned, or
(b) where more than one person is concerned, the latest date on which such notice is given to any of them,
the apportionment shall be made in such manner as may be specified in the notice given by the person or persons concerned.
(5) In this paragraph “tax” includes income tax or capital gains tax." (FA 1998, Sch 18, para 64(2) - (5))
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Appeals provisions apply
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"(5) The provisions of the Taxes Management Act 1970 relating to appeals against decisions on claims apply with any necessary modifications to a decision on the revocation or variation of a claim by virtue of this paragraph." (FA 1998, Sch 18, para 62(5))
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Consequential claims affecting others (corporation tax)
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Claim etc affecting the liability of another requires written consent
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"(1) If the effect of the exercise by any person of a power conferred by paragraph 62 would be to alter the liability to tax of another person, the power may not be exercised except with the consent in writing of that other person or, if he has died, of his personal representatives." (FA 1998, Sch 18, para 63(1))
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Tax includes income tax or CGT
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"(3) In this paragraph “tax” includes income tax or capital gains tax." (FA 1998, Sch 18, para 63(3))
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No further consequential claim if assessment is the result of a previous consequential claim
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"(2) Where such a power is exercised so as to increase the liability to tax of another person, neither paragraph 61 above nor section 43A of the Taxes Management Act 1970 (which makes corresponding provision in relation to income tax or capital gains tax) applies in relation to any amendment or assessment made because of that increased liability." (FA 1998, Sch 18, para 63(2))
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Consequential corporation tax claims following amendment or assessment: loss of tax deliberate or careless
"(1) This paragraph applies where an assessment is made on a company in a case involving [a loss of tax brought about carelessly or deliberately by—
(a) the company, or
(b) a person acting on behalf of the company, or
(c) a person who was a partner of the company at the relevant time.
(2) If the company so requires, effect shall be given in determining the amount of the tax charged by the assessment to any relief or allowance to which the company would have been entitled for that accounting period on a claim or application made within the time allowed by the Taxes Acts." (FA 1998, Sch 18, para 65)
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Claims for double taxation relief in relation to petroleum revenue tax​
"(1) This section has effect in relation to a claim for relief under sections 2 to 6 of TIOPA 2010 in relation to petroleum revenue tax.
(2) The claim shall be for an amount which is quantified at the time when the claim is made.
(3) If, after the claim has been made, the claimant discovers that an error or mistake has been made in the claim, the claimant may make a supplementary claim within the time allowed for making the original claim.
(4) Schedule 1A to this Act applies as respects the claim, but as if the reference in paragraph 2A(4) to a year of assessment included a reference to a chargeable period.
(5) The claim may not be made more than 4 years after the end of the chargeable period to which it relates, but this is subject to any provision of the Taxes Acts prescribing a longer or shorter period.
(6) If the claim or a supplementary claim could not have been allowed but for the making of an assessment to petroleum revenue tax after the end of the chargeable period to which the claim relates, the claim or supplementary claim may be made at any time before the end of the chargeable period following that in which the assessment is made.
(7) In this section “chargeable period” has the same meaning as in the Oil Taxation Act 1975 (see section 1(3) and (4) of that Act, under which a period that is a chargeable period ends with 30 June or 31 December and, apart from the first chargeable period in relation to an oil field, is a period of 6 months)." (TMA 1970, s.43D)
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HMRC implied power to extend time limits
“As far as the discretion to waive the time limit in question is concerned, it was common ground before me that HMRC have such a discretion. This arises by virtue of the care and management provision in s.1(1) TMA (above), as explained by Sir Thomas Bingham MR in R v Commrs of Inland Revenue ex parte Unilever plc and related application [1996] STC 681, at p.686…” (R (oao Higgs) v. HMRC [2015] UKUT 92 (TCC), §53, Barling J).
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"[28] HMRC contend that it is “well established” that HMRC have discretion to accept something done late by a taxpayer, in appropriate circumstances and cite as an example the observation of Sir Thomas Bingham MR (as he then was) in R v Inland Revenue Commissioners, ex parte Unilever plc and related application [1996] STC 681 at 685...
[29] HMRC submit that s 5 of the Commissioners for Revenue and Customs Act 2005 is essentially the successor to section 1(1) of the Taxes Management Act 1970 and that the “collection and management” power in s 5 Commissioners for Revenue and Customs Act 2005 is the equivalent of the old “care and management” power in the TMA by virtue of s 51(3) Commissioners for Revenue and Customs Act 2005 and refer to the decision of the Upper Tribunal (Fancourt J and Judge Sinfield) in R (on the application of Ames) v HMRC [2018] STC 1704..." (Merchant v. HMRC [2020] UKFTT 299 (TC), Judge Brooks)
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“That HMRC have a discretion to extend time limits was confirmed by Sir Thomas Bingham in R v CIR (ex p Unilever plc) [1996] STC 681 at p 686.” (Ames v. HMRC [2015] UKFTT 337 (TC), §111).
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Tribunal has no jurisdiction over refusal to extend time limit
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“…we were also unable to identify any provision which gives a person the right to appeal against an HMRC refusal to allow a late claim. TMA s 33 simply states the time limit. TMA Sch 1A, which provides for claims made outside returns, only allows appeals against amendments to claims, not against a refusal to extend a time limit so as to admit a claim. We therefore find that the Tribunal has no jurisdiction to allow Mr Ames to make a late claim.” (Ames v. HMRC [2015] UKFTT 337 (TC), §110).
HMRC look for some responsibility or fault on their part
“The principles on the basis of which the exercise of that discretion should be considered (other than those relating to the application of A1P1) were not really canvassed before me in any depth. [HMRC] merely indicated that the necessary criteria, which included the ability to attribute some responsibility or fault to HMRC, were not present in this case.” (R (oao Higgs) v. HMRC [2015] UKUT 92 (TCC), §61, Barling J).
Failure to consider discretion results in referral back to HMRC
“I consider that in the event that on an appeal my decision on the construction of [TMA 1970] s.34(1) is held to be wrong, so that the time limit in that subsection applies in this case, the matter should be remitted to HMRC for them to give full and proper consideration to whether it would be appropriate to exercise their discretion to extend the time limit so as to permit the Claimant’s self-assessment and repayment claim to be processed.” (R (oao Higgs) v. HMRC [2015] UKUT 92 (TCC), §63, Barling J).
No general reasonable excuse extension of time limits
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"Even without attending too closely to the context, I take a different view to the UT as to the natural and ordinary meaning of the critical words. As it seems to me, they ordinarily cover mandatory acts, rather than the conditions attached to the voluntary exercise of rights. To be valid, a repayment claim must be made within four years of the end of the relevant tax year, but there is no requirement imposed on a taxpayer to make a repayment claim within four years or at all. I would not disagree with the UT that it is no stretch of language to say that if a taxpayer chooses to make a claim, it "is required to be done" within a certain time limit, but that is not to say that the ordinary meaning of the unqualified words "anything required to be done" extends to the performance of a condition for a valid claim." (HMRC v. Raftopoulou [2018] EWCA Civ 818, §64, David Richards LJ)
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Intention to make claim notified before time limit expired​
"If you receive a completed claim form after the time limit has expired you should mention the usual time limit requirements in your reply and ask about the reasons for the delay, if they are not apparent. When you receive a reply to your letter you should consider whether any of the exceptions mentioned at INTM330760 apply. If none of the exceptions apply you should consider whether, before the time limit expired, there was any implied intention to make a claim.
You should then refer the matter to Specialist Personal Tax, PT International Advisory with a summary of relevant events and actions" (INTM330770)
HMRC practice re double tax claims
"You may receive a notice of intention to claim in the period leading up to the expiry of the time limit. You should always reply promptly to letters indicating an intention to make a claim. In particular you should make sure that you reply before the time limit expires." (INTM330750)
More than two months to expiry of time limit
"Where the time allowed for making a claim will not expire within the next two months you should
- tell the claimant or agent about the time limit requirements and
- say that the claim should be made no later than 5 April, or other date on which time limit expires, as appropriate.
For example an agent writes to you in October 2011 giving notice of the client’s intention to make a claim for 2007/08. You reply to the letter and say that the claim should be made no later than 5 April 2012." (INTM330750)
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Less than two months to expiry of time limit
"Where the time limit expires in less than two months you should
- tell the claimant or agent about the normal time limit requirements and
- say that you will accept the claim after expiry of the time limit provided that the claim is made within two months of the expiry of the time limit.
For example a person writes to you in March 2011 and says that he/she wishes to make a claim for 2007/08. You reply before the end of March 2011 and say that you will accept the claim provided that he/she makes the claim no later than 5 June 2011. In the case of a DT claim you should ask the claimant to tell you when he/she sends the form for certification to the taxation authority in his/her country of residence and perhaps ask him/her to send you a copy of the form." (INTM330750)
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Time limit has already expired (offer 2 months)
"If the letter reached the office before the time limit expired but you are replying after the expiry date you should
- tell the claimant or agent about the normal time limit requirements and
- say that you will accept the claim provided that the claim is made within two months of the date of your letter.
If the letter expressing an intention to claim reached the office after the time limit expired you should refer the matter to the MAP mailbox who will consider whether, exceptionally, we can accept a late claim." (INTM330750)
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Statutory powers to extend time limits
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Group relief claims
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"(1) A claim for group relief may be made or withdrawn at any time up to whichever is the last of the following dates—
(a) the first anniversary of the filing date for the company tax return of the claimant company for the accounting period for which the claim is made;
(b) if notice of enquiry is given into that return, 30 days after the enquiry is completed;
(c) if after such an enquiry an officer of Revenue and Customs amend the return under paragraph 34(2), 30 days after notice of the amendment is issued;
(d) if an appeal is brought against such an amendment, 30 days after the date on which the appeal is finally determined.
(2) A claim for group relief may be made or withdrawn at a later time if an officer of Revenue and Customs allows it." (FA 1998, Sch 18, para 74)
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- Exercise of HMRC's discretion​
Statement of practice 5/01
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9. The time limits allowed for making claims to loss relief, capital allowances and group relief under CTSA and the further provisions described above should generally be adequate and the Commissioners for Her Majesty's Revenue and Customs will not make routine use of its powers to accept claims made outside these limits. But the Commissioners for Her Majesty's Revenue and Customs recognise that there may be exceptional reasons why a claim is not made within the time specified. Applications to allow further time in accordance with the powers referred to at paragraph 1 above will be considered with the assistance of the following criteria.
10. In general, the Commissioners for Her Majesty's Revenue and Customs' approach will be to admit claims which could not have been made within the statutory time limits for reasons beyond the company's control. This would include, for example, cases where:
• at the date of the expiry of the time limit, the company or its agents were unaware of profits against which the company could claim relief, or
• the amount of a profit or loss depended on discussions with an Inspector which were not complete when the time limit expired, and the delay in agreeing figures is not substantially the fault of the company or its agents.
In such cases the Commissioners for Her Majesty's Revenue and Customs' approach will be to admit late claims up to the amount of the profit or loss in question. Where the claim involves the withdrawal of an existing claim and the making of a fresh claim, the Commissioners for Her Majesty's Revenue and Customs' approach will be to admit these to the extent of the profit or loss in question. Claims which go beyond this and affect profits which were not in dispute at the time of expiry of the statutory time limits will not be within this approach.
Reasons beyond the company's control would also include a claim where all of the following four features were present:
• an officer of the company was ill or otherwise absent for a good reason;
• the absence or illness arose at a critical time and prevented the making of a claim within the normal time limit;
• there was good reason why the claim was not made before the time of the absence or illness;
• there was no other person who could have made the claim on the company's behalf within the normal time limit.
11. The Commissioners for Her Majesty's Revenue and Customs would not, however, regard the following as reasons beyond the company's control:
• oversight or negligence on the part of a claimant company or its agent
• failure, without good reason, to compute the necessary figure
• the wish to avoid commitment pending clarification of the effects of making a claim
• illness or absence of an agent or adviser to the company.
12. There may be cases falling outside the general approach outlined in paragraph 10 where it would nevertheless be unreasonable, given the overall circumstances of the case, for the Commissioners for Her Majesty's Revenue and Customs to refuse a late claim. It is likely that such cases will involve a combination of factors, but the following criteria may be relevant:
• the reason why a claim is late – where the reason does not in itself warrant admission of the claim under the approach outlined above, it will still be taken into account by the Commissioners for Her Majesty's Revenue and Customs in assessing the circumstances as a whole
• the extent to which it is late
• the consequences for the company if the claim is refused
• any particularly unusual features.
For the purpose of this paragraph and those above, if the late claim forms part of a scheme or arrangement, the main purpose or one of the main purposes of which is the avoidance of tax (including the payment of tax), then that will be taken into account in the Commissioners for Her Majesty's Revenue and Customs' approach."
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- Does not apply to claims arising as a result of events occurring after the applicable time limit
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"[10] The appellants contend that their reasons for failing to make the necessary claim within the statutory time limit were clearly matters beyond their control. In respect of 2007, they could not have made their claim in time because the sale of the business of North had neither taken place nor been anticipated when their time limit expired.
[11] In agreement with the Judge and the respondents, I do not think it possible to construe paragraph 10 of the Statement of Practice as applicable to claims arising as a result of events occurring after the applicable time limit. Such events are never within the control of the taxpayer, simply because the future is always unknown. On the appellants' construction, such events are always within paragraph 10 and should, or at least may, give rise to an extension of time. This is what the Judge considered to be unarguable. I agree. Furthermore, the various examples given in the Statement of Practice of the application of paragraph 10 are all, it seems to me, of cases in which the financial consequences of events prior to the expiry of the time limit were unknown or unquantified for good reason; none points to the application to paragraph 10 to subsequent events or their consequences. I see no arguable error of law in the respondents' interpretation and application of paragraph 10." (R (aoa GMGRM North Ltd) [2014] EWCA Civ 844, §§10 - 11, Sir Stanley Burton)
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