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Procedure.Tax
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G3: Assessments to recover excessive repayment
Power to assess to recover excessive repayment of income tax or CGT
"(1) Where an amount of income tax or capital gains tax has been repaid to any person which ought not to have been repaid to him, that amount of tax may be assessed and recovered as if it were unpaid tax." (TMA 1970, s.30(1))
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Includes repayment supplement, interest and other increases
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"(2) In any case where—
(a) a repayment of tax has been increased in accordance with section 824 of the principal Act or section 283 of the 1992 Act (supplements added to repayments of tax, etc) or section 102 of the Finance Act 2009 (repayment interest); and
(b) the whole or any part of that repayment has been paid to any person but ought not to have been paid to him; and
(c) that repayment ought not to have been increased either at all or to any extent;
then the amount of the repayment assessed under subsection (1) above may include an amount equal to the amount by which the repayment ought not to have been increased." (TMA 1970, s.30(2))
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"(3) In any case where—
(a) a payment, other than a repayment of tax to which subsection (2) above applies, is increased in accordance with section 824 or 825 of the principal Act or section 283 of the 1992 Act; and
(b) that payment ought not to have been increased either at all or to any extent;
then an amount equal to the amount by which the payment ought not to have been increased may be assessed and recovered as if it were unpaid income tax." (TMA 1970, s.30(3))
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Includes amounts allowed by way of set off
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"(7) In this section any reference to an amount repaid or paid includes a reference to an amount allowed by way of set-off." (TMA 1970, s.30(7))
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- Section 29 has priority
"(1A) Subsection (1) above shall not apply where the amount of tax which has been repaid is assessable under section 29 of this Act." (TMA 1970, s.30(1A))
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- Application of s.29 machinery
"(1B) Subsections (2) to (8) of section 29 of this Act shall apply in relation to an assessment under subsection (1) above as they apply in relation to an assessment under subsection (1) of that section; and subsection (4) of that section as so applied shall have effect as if the reference to the loss of tax were a reference to the repayment of the amount of tax which ought not to have been repaid." (TMA 1970, s.30(1B))
- Time limit
"(5) An assessment under this section shall not be out of time under section 34 of this Act if it is made before the end of whichever of the following ends the later, namely—
(a) the year of assessment following that in which the amount assessed was repaid or paid as the case may be, or
(b) where a return delivered by the person concerned is enquired into by an officer of the Board, the period ending with the day on which, by virtue of section 28A(1B) of this Act, the enquiry is completed.
(6) Subsection (5) above is without prejudice to section 36 of this Act." (TMA 1970, s.30(5) - (6))
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Corporation tax
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- Power to assess to recover excessive repayments within the corporation tax regime
(1) The provisions of paragraphs 41 to 48 relating to discovery assessments apply to an amount to which this paragraph applies as if it were unpaid tax, unless—
(a) it is assessable under those provisions apart from this paragraph, or
(b) it is recoverable under section 826(8A) of the Taxes Act 1988 (interest overpaid which is recoverable in same way as interest charged).
(2) This paragraph applies to an amount paid to a company by way of—
(a) repayment of tax (or income tax),
(b) repayment supplement under section 825 of the Taxes Act 1988,
(bza) R&D expenditure credit under Chapter 6A of Part 3 of the Corporation Tax Act 2009,
(ba) R&D tax credit under Chapter 2 or 7 of Part 13 of the Corporation Tax Act 2009,
(bb) land remediation tax credit or life assurance company tax credit under Part 14 of the Corporation Tax Act 2009 or
(bc) …
(bd) film tax credit under Part 15 of the Corporation Tax Act 2009,
(be) television tax credit under Part 15A of that Act,
(bf) video game tax credit under Part 15B of that Act,
(bg) theatre tax credit under Part 15C of that Act,
(bh) orchestra tax credit under Part 15D of that Act,
(bi) museums and galleries exhibition tax credit under Part 15E of that Act,
(c) interest paid under section 826 of the Taxes Act 1988,
to the extent that it ought not to have been paid.
(2A) The provisions of paragraphs 41 and 45 to 48 relating to discovery assessments apply to an amount paid to a company by way of first-year tax credit under Schedule A1 to the Capital Allowances Act as if it were unpaid tax, but only to the extent that the company was not, or is no longer, entitled to it.
(3) For the purposes of this paragraph—
(a) an amount is regarded as paid if it is allowed by way of set-off, and
(b) an amount is regarded as a repayment if it was intended as repayment but exceeds the amount paid by the company.
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(5) An assessment to recover—
(a) an amount of tax repaid to a company in respect of an accounting period, or interest on any such repayment,
(aa) an amount of R&D expenditure credit paid to a company for an accounting period,
(ab) an amount of R&D tax credit paid to a company for an accounting period,
(ac) an amount of land remediation tax credit or life assurance company tax credit paid to a company for an accounting period, or
(ad) …
(ae) an amount of film tax credit paid to a company for an accounting period,
(af) an amount of first-year tax credit under Schedule A1 to the Capital Allowances Act paid to a company for an accounting period,
(ag) an amount of television tax credit paid to a company for an accounting period,
(ah) an amount of video game tax credit paid to a company for an accounting period,
(ai) an amount of theatre tax credit paid to a company for an accounting period,
(aj) an amount of orchestra tax credit paid to a company for an accounting period,
(ak) an amount of museums and galleries exhibition tax credit paid to a company for an accounting period,
(b) an amount of income tax repaid to a company in respect of a payment received by the company in an accounting period, or interest on any such repayment,
shall be treated as an assessment to tax for the accounting period referred to in paragraph (a), (aa), (ab), (ac), (ae), (ag), (ah), (ai), (aj), (ak) or (b)." (FA 1998, Sch 18, para 52(1) - (5))
Interest is charged
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"(6) The sum assessed shall carry interest at the prescribed rate for the purposes of section 87A of the Taxes Management Act 1970 (interest on overdue corporation tax, etc) from the date when the payment being recovered was made until payment." (FA 1998, Sch 18, para 52(6))
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- Time limit
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"(1) An assessment made by virtue of paragraph 52 is not out of time under paragraph 46(1) (general 4 year time limit for assessments) if it is made—
(a) before the end of the accounting period following that in which the amount assessed was paid, or
(b) if later, before the end of the period of three months beginning with the day on which an officer of Revenue and Customs completes an enquiry into a relevant company tax return by the company concerned.
(2) Sub-paragraph (1) above is without prejudice to paragraph 46(2) and (2A) (time limit for assessment in case of loss of tax brought about carelessly or deliberately)." (FA 1998, Sch 18, para 53)
SDLT
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"(1) If an amount of tax has been repaid to any person that ought not to have been repaid to him, that amount may be assessed and recovered as if it were unpaid tax.
(2) Where the repayment was made with interest, the amount assessed and recovered may include the amount of interest that ought not to have been paid.
(3) The power to make an assessment under this paragraph in respect of a transaction for which the purchaser has delivered a land transaction return is subject to the restrictions specified in paragraph 30." (FA 2003, Sch 10, para 29)
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- Time limit
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"(3) An assessment under paragraph 29 (assessment to recover excessive repayment of tax) is not out of time—
(a) in a case where notice of enquiry is given into the land transaction return delivered by the person concerned, if it is made before the enquiry is completed;
(b) in any case, if it is made within one year after the repayment in question was made." (FA 2003, Sch 10, para 31)
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