UK Government Amends Law On Overpaid Tax

by Robin Pilgrim, LawAndTax-News.com, London

24 November 2003

UK Paymaster General, Dawn Primarolo on Thursday issued a statement in which she revealed that the UK government has amended recently introduced legislation designed to limit the time frame for repayment of overpaid tax by the Inland Revenue.

In September, the government announced that it intended to include in its Finance Bill 2004, legislation to ensure that for Inland Revenue taxation matters, the usual six year time limit would be applied to common law actions for relief from the consequences of a mistake of law as is the case in other actions to recover direct tax.

However, according to an Inland Revenue statement:

"Some claimants who had commenced proceedings before 8 September 2003 are seeking to amend their claims to add in years beyond the normal time limits. They are doing so because, under existing law, if the courts allow an amendment of this sort, it is deemed to be a new action started on the date of the original action. So it is arguable that the legislation announced on 8 September would not apply to such an amendment. And, other claimants may also seek to amend their existing claims to add in years beyond the normal time limits."

The statement went on to observe that:

"Whilst the Inland Revenue may well succeed in opposing amendments to existing claims in the courts, this risk is unacceptable. So, in the meantime, to ensure that tax revenues are further protected, the amended draft legislation announced today will prevent amendments being made to proceedings for relief from the consequences of a mistake of law, commenced before 8 September, to introduce new periods of claim for years beyond the normal time limits. The change announced today will not, however, affect applications made to the court before today."

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