HMRC - interest on overpaid tax?

[Conniff]

Just as important (if not more) spiceskull is the NI. If you have missed ten years of NI, you pension will be affected, so you should give them a bell and ask them to send you an update on missing payments. They will also tell you how much you need to catch up to qualify for a full pension.

[Spiceskull]

Originally Posted by Conniff

Just as important (if not more) spiceskull is the NI. If you have missed ten years of NI, you pension will be affected, so you should give them a bell and ask them to send you an update on missing payments. They will also tell you how much you need to catch up to qualify for a full pension.

LOL - the last ten years have been OVERPAYMENTS, and it follows that I may be due a rebate from NI as well...

[Spiceskull]

Formal request for all overpayment data, plus acceptable interest rates made today.

[Bookworm]

Spicey, my little cinnamon cake, have you paid attention to this? I was meaning to bring it to your attention, and no, it isn't just one of my disjointed ramblings or musings:
EU court says up to UK authority to rule on tax treatment of M&S teacakes - Forbes.com

Interesting, because:

As a result, customs and excise, on their own initiative, accepted that the claim should not be time barred

and here:

Marks & Spencer tax rebate is a piece of cake - Telegraph

Food for thought, if you'll forgive the bun. Sorry, the pun.

[Spiceskull]

Interesting reading - ta for that. Effectively under the equal treatment rule, if an error can be proven then there is no limitation period...but then again, surely the exemptions from SLA allow for remedy from the result of an error...

However, the "on their own initiative" does sound nice, and demonstrates that HMRC at least accept that the exemptions should be applied where relevant...

Just waitning for them to get back to me now...

[Spiceskull]

Interesting bit of information/quote from HMRCs own website:

The Limitation Act 1980 applies to the recovery of debts in England and Wales. Section 37(2) of the Act confirms that tax and 'other duties due to the Crown' are specifically excluded from the provisions of it, but NICs are not.

To me the bit in red includes ALL taxes and duties, and therefore also includes "negative" amounts...if HMRC owes me £1,000 then my duty to the crown is -£1,000, and this "liability" is specifically excluded from the statute...

[photoman]

Hi guys,
Can't help joining in here, it's just that I was looking at new posts (trying to do my bit for CAG by helping those with unanswered posts), and noticed this thread.

IMHO, I think the issues involved here have already been touched upon by others posting on here, but I'd just like to add my own views.

Firstly, under the circumstances I think it would be fairly easy to establish that the overpayments were made under mistake; either it be your own mistake in conceding at the time that the payments were correct and due, or by a mistake on behalf of the HMRC in their calculations and collections.
Thus, I believe this should allow invocation of sec32 of the SOL, allowing the 6 year bar to be lifted, in that time did not start to run until you discovered the mistake. ie; 6 years from now in which to act, with no limitation as to how far back you may go.

Secondly, under the ruling in Sempra it was established in such cases that compound interest could be applied in restitution. This is because, they would have had the benefit of the use of your money over the period, which they perhaps could then have either invested at compound rates or would otherwise have had to borrow elsewhere at compounded rates. Either way, a probable benefit to themselves.
Even then, it is not necessary to establish that they would have actually gained by investing the sums or by not having to borrow elsewhere, it is the simple fact that all money has a "Time Value" (TV).
Quote "But money
has a value, and in my opinion the measure of the right to subtraction of the
enrichment that resulted from its receipt does not depend on proof by Sempra
of what the Revenue actually did with it."

So, it has nothing to do with your own losses, whether it be the fact that you would have earned interest on the sums had you otherwise had them, or conversely by way of recompense to yourself, due to the fact that you were forced to borrow at compounded rates to make up your own shortfall.
So there is no need to base such a claim upon or show any such losses of your own.
It is a restitution of their own probable/possible gains that is at issue, in that they would be left having unfairly gained from what was an error on their behalf should only statutory interest be applied.
Quote "The essence of the claim is that the
Revenue was unjustly enriched because Sempra paid the tax when it did in the
mistaken belief that it was obliged to do so when in fact it was being levied
prematurely. So the Revenue must give back to Sempra the whole of the
benefit of the enrichment which it obtained. The process is one of subtraction,
not compensation."

So, this just leaves what rate to charge.
This is also covered by the ruling in Sempra:
The Defence (HMRC) tried to argue that it was wrong to assume
that the Government invested the payments that it received on the basis that it
would receive a compound return for it in the commercial market. But the
judge did not, in the event, have to resolve this issue. It was common ground
before him that if compound interest was to be awarded it should be calculated
on a conventional basis – the rate being derived from the rates of interest
generally prevailing on borrowings during the relevant period.

So that's my tuppence worth.

I would be interested to see what others have to say ?

PM

[Spiceskull]

Thanks for that - broadly in agreement with my own views, although I must stress that my own views are not about compensation and/or earning interest at a commercial rate.

However, I would argue the compound element, and have raised this with them in my letter. I have also found the interest rates applied by HMRC over the last eight years - these broadly equate to 2% above bank base, so I feel that my own position on this is justified. After all, if I owed them the money then these are the rates they would levy to my liability.

It is interesting to note that their rates do not synchronise with the tax year, so calculations are going to be a bit of a pig...especially the compounded bit. Additionally, as with the banks, it is hard to determine at which point to start claiming interest.

For me the "error in favour of" approach is probably best: I will claim from the end of the tax year in question (as all overpayments will have been made either weekly or monthly) - this means I lose out on interest for the year's earlier payments, but to do otherwise would be entering the realms of pedantic pettiness...something I would NEVER dream of doing...

Anyroad Chucks...I am waiting to hear from them soon, and should have an update for the end of the week...

[GuidoT]

For what it is worth, in the last few years I have over and underpaid and the rate they charged me and refunded for interest was the same.

I have the papers and if it helps I will see if I can see dig out the rate.

[Spiceskull]

Originally Posted by GuidoT

For what it is worth, in the last few years I have over and underpaid and the rate they charged me and refunded for interest was the same.

I have the papers and if it helps I will see if I can see dig out the rate.

The same rate for penalty/refund or the same rate year on year? I would like to know, as at the moment the only figures I have are:

06/01/08 7.50%
06/08/07 8.50%
06/09/06 7.50%
06/09/05 6.50%
06/09/04 7.50%
06/12/03 6.50%
06/08/03 5.50%
06/11/01 6.50%
06/05/01 7.50%
06/02/00 8.50%

[photoman]

Originally Posted by Spiceskull

Interesting bit of information/quote from HMRCs own website:To me the bit in red includes ALL taxes and duties, and therefore also includes "negative" amounts...if HMRC owes me £1,000 then my duty to the crown is -£1,000, and this "liability" is specifically excluded from the statute...

IMHO sec. 37 may be difficult to arguable in your favour.
The key phrase that may cause issue in trying to use this is "Due to the crown" , the key words being "due to".
This could be argued as applicable in one direction only, and so thus exclude sums "owed" by the crown?
So, I think sec. 32 is the best way to go.

[Spiceskull]

Yes and no - the due to the crown bit activates s.32 anyway, as it is intended to do.

Any reasonable person would deduce that "due to the crown" equals "that due minus that paid" in otherwords where there is imbalance in the figures, the difference is due to the crown.

By implication that balance could be a negative amount, and the crown does like to keep the figure balanced.

Anyhow, this is all speculation - my experience to date with HMRC leads me to believe that as long as my figures are reasonable and logical they will no doubt settle without argument.

[Spiceskull]

LOL - the irony of this is not lost on me...I have been job hunting for a couple of months, and finally I have an interview on Friday, for a position with HMRC...I guess that means my claim will be dealt with swiftly...