Special Relief

Special Relief

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Taken a SA client on recently, most income is SCh E, a small amount of A and D.  Sche E is well over £100k pa.

SA returns o/s for 06-07 et seq.

Determination made for 08/09, thtats in date, submitting the return will clear it.

Problem is 06/07, HMRC had client on a D0 m1 code, and I have a o/p of £8,500 on SAR.

As we can only go back four years, AIUI that covers 10/11, 09/10, 08/09 and 07/08 - and of course 11-12

What can we do about 06-07.  I don't think Special Relief Condition A, SACM12240, is going to help taking the Special Relief interpretation from the manual.

Is there any scope to push Condition A of Special Relief beyond the HMRC manual, or anything else I've missed?

Replies (6)

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By pjones
22nd Nov 2012 15:50

2007/08 also out of time

Time limit is four years from end of tax year therefore 07/08 out of time from 6 April 2012 and this determination will also stand.

Now that equitable liability has been replaced by Special Relief, it is harder to have the assessments changed, the main reason being the conditiona A that needs to be satisfied.

It is certainly worth trying to obtain the relief and the HMRC manuals are only guidance and their interpretation of the legislation.  It and the examples given by HMRC are not binding. 

One advantage of Special Relief being included into legislation is that, in the event that it is rejected, as with any other claim and in the event that it is felt unreasonably unjust to refuse, it is possible to appeal the decision to the Tribunal.

Of course any claim does need consideration and planning, particularly to ensure that conditions are met - is there a case that HMRC have failed in issuing correct tax codes hence the D0M1 code operated?  If so then this can only increase the chances of a successful claim.

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By Anthony123
22nd Nov 2012 20:56

Worth a try

since as stated above you could always appeal.

However your client will need a really good "story" to explain why he did not do his returns within the time limit to displace the determination.

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By Eve 2206
23rd Nov 2012 08:18

just out of curiosity....

I know circumstances are different for everyone but your client hasn't managed his tax now for a number of years.  Did HMRC add on a load of penalty charges and interest?  Reason I'm asking is I've not got a client like this but curious as to what to expect if such a client came along one day.  Would HMRC relent on any such charges/interest?

thanks

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By pjones
23rd Nov 2012 08:57

Penalties and Interest

HMRC would indeed charge interest on the determinations if not paid on time and also penalties accruing each year for non submission of tax returns - these will not be displaced if a tax liability (i.e. the determination) is greater than £100 for each out of date year.

If years are in date (i.e 08/09 onwards) and returns are submitted now showing NIL liability, with the exception of 2010/11 which falls under the new penalty regime and therefore penalties for non submission are not capped, the earlier years penalties would be reduced to NIL.

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By Eve 2206
23rd Nov 2012 09:43

thanks

that's very helpful

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By girlofwight
27th Nov 2012 11:57

Thanks folk, useful pointers :)

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