Where a taxpayer has paid an amount of income tax, capital gains tax or corporation tax and now believes that the tax was not due, the taxpayer can make a claim to HMRC for repayment. Where the tax has been assessed but not yet paid, the claim will be for the amount of tax assessed to be discharged. In either case, this is known as a claim for overpayment relief.
The conditions for overpayment relief are restrictive in that there are a number of circumstances in which a claim will not be accepted by HMRC, for instance if the overpayment arises from a mistake in a claim, election or notice (or a mistake consisting of making or giving, or failing to make or give, a claim, election or notice) or a mistake in calculating the claimant's liability where the liability was calculated in accordance with the practice generally prevailing at the time.
A claim will not be accepted if, for example, the claimant can seek (or could have sought) relief by taking other steps under tax legislation or if the claim is made on grounds that have been already put to a court or tribunal in the course of an appeal.
A claim must be made within four years after the end of the tax year or company accounting period to which it relates. This is generally the year (or period) for which the payment was made or the tax assessed. Where the amount paid or assessed is excessive due to a mistake in a tax return, it is the year (or period) to which the return (or, if more than one of them, the first return) relates.
An overpayment relief claim cannot be included in a tax return.