What happens if the Revenue repays tax by mistake?

What happens if the Revenue repays tax by mistake?

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In relation to a death estate that was wound up in 1999/2000, there was income and capital gains tax of £8K, which the executors paid on time.

However, in 2005/06, the Revenue repaid the £8k back to the executors. This prompted them to enquire why there was no repayment supplement. On further investigations, the Revenue had failed to raise an assessment in 1999/00 and consequently should not have paid back the £8K.

The Revenue is now seeking to recoup the tax back from my client (who has spent it!!). Does he have any grounds to contest/refuse payment?
Lina Bolton

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By User deleted
25th May 2006 10:21

This was surely under self-assessment rules
so the question of assessments does not arise . From what you say , the executors filed a correct self assesment return for 1999/2000, and paid over the appropriate tax.

If that is what happened, and the Revenue erroneously repaid the tax due, then they are entitled to recover it.

If in the alternative no return was filed, but the tax was paid under some informal arrangement to wind up the estate, then the executors were negligent in failing to file a return, and the Revenue can recover the tax .

There remians the question of whether a 'hardship' cliam can mitigate the repayment claimed.

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