Finance (No. 2) Act 2023

Part 12 U.K. Appeals and claims

Claims in relation to overpaid tax U.K.

51 (1) A person (a “claimant”) who has paid an amount by way of multinational top-up tax may make a claim to the Commissioners for repayment of tax that was not due.

(2) The claim must—

(a) be made on or before the overpayment claim date,

(b) be in the form and contain information specified in a notice published by HMRC, and

(c) not be submitted at the same time as a self-assessment return.

(3) The overpayment claim date is the date four years after the end of the accounting period in respect of which the amount was paid.

(4) The Commissioners must give effect to a claim as made, unless—

(a) a condition in sub-paragraph (2) is not met in relation to the claim,

(b) paragraph 52 applies, or

(c) the claim is amended following an enquiry under paragraph 53.

(5) The Commissioners are not otherwise, in the absence of a claim under this paragraph, liable to repay any amount paid by way of multinational top-up tax by reason of the fact it was not tax due.

(6) The Commissioners may however repay an amount paid that was not tax due to the person who paid that amount.

(7) An amount that may be repaid by the Commissioners under this paragraph, but is not repaid, incurs interest at the rate provided for in regulations made under section 178 of FA 1989 from the later of—

(a) the day after the latest day (under paragraph 32) by which the amount paid would have been required to be paid as multinational top-up tax if it were due, and

(b) the day on which the amount was paid.

(8) Paragraph 54 makes further provision in relation to amounts repaid.

52 (1) This paragraph applies where one or more of Cases A to D apply.

(2) Case A applies where a member of the claimant’s group has an unpaid liability to tax.

(3) Case B applies where the claimant is seeking or will be able to seek relief by taking other steps under this Part of this Act.

(4) Case C applies where the claimant—

(a) could have sought relief by taking such steps within a period that has now expired, and

(b) knew, or ought reasonably to have known, before the end of that period that such relief was available.

(5) Case D applies where—

(a) the amount paid is excessive by reason of a mistake in calculating the amount of tax payable by members of the claimant’s group for the accounting period, and

(b) the amount was calculated in accordance with the practice generally prevailing at the time.

(6) Where this paragraph applies, the Commissioners are not liable to repay any amount paid by way of multinational top-up tax by reason of the fact it was not tax due.

53 (1) An officer of Revenue and Customs may enquire into a claim if, within the time allowed, the officer gives notice to the claimant of the officer's intention to do so.

(2) The time allowed is the period ending with the quarter day next following the first anniversary of the day on which the claim was made.

(3) The quarter days are 31 January, 30 April, 31 July and 31 October.

(4) A claim enquired into under sub-paragraph (1) may not be the subject of a further notice under that sub-paragraph.

(5) An enquiry is completed when the officer by notice (a “closure notice”) informs the claimant that the enquiry is complete and states the conclusion reached in the enquiry.

(6) The conclusion must be one of the following—

(a) that no amendment of the claim is required, or

(b) that the amendments of the claim specified in the notice are to be made.

(7) A closure notice takes effect when it is issued.

(8) The officer must give effect to any amendments made by the closure notice by making such adjustments as may be necessary whether—

(a) by way of assessment, or

(b) by discharge or repayment of tax.

(9) The adjustments must be made within 30 days of the date of issue of the closure notice.

(10) Paragraph 23 (direction to complete enquiry) applies in relation to an enquiry under this paragraph as it applies in relation to an enquiry under paragraph 16.

54 (1) This paragraph applies where—

(a) an amount has been paid by way of a repayment of tax, and

(b) the amount paid exceeded the amount which the Commissioners were or could be liable at that time to repay.

(2) The Commissioners may—

(a) to the best of their judgment, assess the amount of the excess, and

(b) notify the amount to the person to whom the repayment was made.

(3) Sub-paragraph (4) applies where—

(a) an assessment has been notified under sub-paragraph (2), and

(b) it appears to the Commissioners that the amount which ought to have been assessed as due exceeds the amount that has already been assessed.

(4) The Commissioners may—

(a) on or before the last day on which the assessment could have been made, make a supplementary assessment of the amount of tax due, and

(b) notify the amount to the person to whom the repayment was made.

(5) An amount assessed and notified under sub-paragraph (2) or (4) counts as a liability to multinational top-up tax for the purposes of this Part of this Act.

(6) But sub-paragraph (5) does not have effect if, or to the extent that, the assessment has been withdrawn or reduced.

(7) An assessment under this paragraph may not be made more than 4 years after the end of the accounting period in which evidence of facts sufficient in the opinion of the Commissioners to justify making the assessment comes to their knowledge.

Appeals of decisions: general U.K.

55 (1) An appeal may be brought against—

(a) an amendment of a self-assessment return under paragraph 19 (amendment during enquiry to prevent loss of tax);

(b) an amendment made by a closure notice under paragraph 22;

(c) a discovery assessment;

(d) an assessment of a penalty under paragraph 42, 43 or 46;

(e) an amendment made by a closure notice under paragraph 53;

(f) an assessment made under paragraph 54.

(2) Any such appeal is to be brought by the filing member (“the appellant”).

(3) Notice of the appeal must be given to HMRC—

(a) in writing, and

(b) within 30 days after the specified date.

(4) “Specified date” means—

(a) in relation to an appeal under sub-paragraph (1)(a), the date on which the notice of amendment was issued;

(b) in relation to an appeal under sub-paragraph (1)(b) or (e), the date on which the closure notice was issued;

(c) in relation to an appeal under sub-paragraph (1)(c), (d) or (f), the date on which the notice of assessment was issued.

(5) The notice of appeal must specify the grounds of appeal.

(6) Notice may be given after the time limit in sub-paragraph (3)(b) if—

(a) HMRC agrees, or

(b) where HMRC does not agree, the tribunal gives permission.

(7) HMRC must agree to notice being given after the time limit if the appellant has requested in writing that HMRC do so and HMRC is satisfied—

(a) that there was a reasonable excuse for not giving the notice before the time limit, and

(b) that the request has been made without unreasonable delay.

(8) If a request of the kind mentioned in sub-paragraph (7) is made, HMRC must notify the appellant of whether or not HMRC agrees to the request.

56 (1) The effect of a notice of appeal being given is that—

(a) a review may be conducted by HMRC into the matter to which the appeal relates;

(b) HMRC and the appellant may settle the appeal by agreement;

(c) the appeal may be determined by the tribunal;

(d) a payment of multinational top-up tax may be postponed pending determination of the appeal.

(2) But if—

(a) the appeal is an appeal under paragraph 55(1)(a) against an amendment of a self-assessment, and

(b) the appeal is made while an enquiry into the return is in progress,

sub-paragraphs (1)(a) and (c) do not apply in relation to the appeal until the enquiry is completed.

(3) See also paragraph 67 for special provision relating to the appeal of a penalty under paragraph 42, 43 or 46.

Reviews by HMRC U.K.

57 (1) A review is to be conducted by HMRC if—

(a) the appellant notifies HMRC that it requires HMRC to review the matter, or

(b) HMRC offers to review the matter and the appellant accepts the offer within the period of 30 days beginning with the date of the offer (the “acceptance period”).

(2) The appellant may not notify HMRC that the appellant requires HMRC to review the matter if—

(a) the appellant has already done so in relation to the same matter,

(b) HMRC has offered to review the matter, or

(c) the appellant has notified the appeal to the tribunal.

(3) HMRC may not offer to review the matter if—

(a) HMRC has already done so in relation to the same matter,

(b) the appellant has notified HMRC that the appellant requires HMRC to review the matter, or

(c) the appellant has notified the appeal to the tribunal.

(4) An offer by HMRC to review the matter must—

(a) be made in writing, and

(b) contain a statement of HMRC’s view of the matter.

(5) If the appellant does not accept the offer within the acceptance period—

(a) HMRC's view of the matter is to be treated as if it were contained in a settlement agreement under paragraph 61, but

(b) the right to withdraw from such an agreement does not apply in relation to that notional agreement.

(6) Sub-paragraph (5) does not apply to the matter if, or to the extent that, the appellant notifies the appeal to the tribunal.

(7) The appellant may notify the appeal to the tribunal—

(a) within the acceptance period;

(b) after the end of that period only if the tribunal gives permission.

58 (1) The review is to be conducted as follows.

(2) If the appellant required the review, HMRC must notify the appellant of HMRC’s view of the matter within—

(a) the period of 30 days beginning with the day on which HMRC received notification of the requirement to review from the appellant, or

(b) such longer period as is reasonable.

(3) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.

(4) For the purpose of sub-paragraph (3), HMRC must, in particular, have regard to steps taken before the beginning of the review—

(a) by HMRC in deciding the matter, and

(b) by any person in seeking to resolve disagreement about the matter.

(5) The review must take account of any representations made by the appellant at a stage which gives HMRC a reasonable opportunity to consider them.

59 (1) The review may conclude that HMRC's view of the matter (as notified to the appellant under paragraph 57(4) or 58(2)) is to be—

(a) upheld,

(b) varied, or

(c) cancelled.

(2) HMRC must notify the appellant of the conclusions of the review and the reasoning for those conclusions within—

(a) the period of 45 days beginning with the relevant day, or

(b) such other period as may be agreed.

(3) In sub-paragraph (2) “relevant day” means—

(a) in a case where the appellant required the review, the day when HMRC notified the appellant of HMRC's view of the matter;

(b) in a case where HMRC offered the review, the day when HMRC received notification of the appellant's acceptance of the offer.

(4) If HMRC do not give notice of the conclusions of the review within the period specified in sub-paragraph (3), the review is treated as having concluded that HMRC's view of the matter in question is upheld.

(5) If sub-paragraph (4) applies, HMRC must notify the appellant of the conclusions which the review is treated as having reached.

(6) The conclusions of a review are to be treated as if they were contained in a settlement agreement under paragraph 61, but the right to withdraw from such an agreement does not apply in relation to that notional agreement.

(7) Sub-paragraph (6) does not apply to the matter if, or to the extent that, the appellant notifies the appeal to the tribunal.

(8) The appellant may notify the appeal to the tribunal—

(a) within the post-review period;

(b) after the end of that period only if the tribunal gives permission.

(9) The post-review period is—

(a) if HMRC has notified the appellant of the conclusions of the review in accordance with sub-paragraph (2), the period of 30 days beginning with that notice;

(b) if HMRC has not so notified the appellant, the period beginning with the day following the last day of the period specified in sub-paragraph (2) and ending 30 days after the date on which HMRC gives notice in accordance with sub-paragraph (5).

60 (1) In paragraphs 57 to 59, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—

(a) notification by HMRC of an offer of review (and of their view of the matter) under paragraph 57;

(b) notification of HMRC's view under paragraph 58(2)(a);

(c) notification of the conclusions of a review under paragraph 59(2) or (5).

(2) But if any such notification is given to the appellant, a copy of the notification may also be given to a person acting on behalf of the appellant.

(3) A notification in connection with a review must be given in writing.

Settlement agreements U.K.

61 (1) “Settlement agreement” means an agreement in writing between the appellant and an officer of Revenue and Customs that is—

(a) entered into before the appeal is determined, and

(b) to the effect that the decision appealed against should be upheld without variation, varied in a particular manner or discharged or cancelled.

(2) Where a settlement agreement is entered into in relation to an appeal, the consequences are to be the same (for all purposes) as if, at the time the agreement was entered into, the tribunal had decided the appeal and had upheld the decision without variation, varied it in that manner or discharged or cancelled it, as the case may be.

(3) Sub-paragraph (2) does not apply if, within 30 days beginning with the date on which the settlement agreement was entered into, the appellant gives notice in writing to HMRC that it wishes to withdraw from the agreement.

(4) Sub-paragraph (5) applies where notice of an appeal has been given and—

(a) the appellant notifies HMRC, orally or in writing, that the appellant does not wish to proceed with the appeal, and

(b) HMRC does not, within 30 days after that notification, give the appellant notice in writing indicating that HMRC is unwilling that the appeal should be withdrawn.

(5) Sub-paragraphs (1) to (3) have effect as if, at the date of the appellant's notification, the appellant and an officer of Revenue and Customs had agreed that the decision under appeal should be upheld without variation.

Determination by tribunal U.K.

62 (1) The appellant may notify the appeal to the tribunal.

(2) If the tribunal decides that a person is overcharged to multinational top-up tax, the assessment must be reduced accordingly.

(3) If the tribunal decides that a person is undercharged to multinational top-up tax, the assessment must be increased accordingly.

(4) In a case where neither sub-paragraph (2) or (3) apply, the assessment is to stand good.

(5) On the determination of the appeal—

(a) any tax overpaid must be repaid as if a claim had been made under paragraph 51 on the day notice of the appeal was given to HMRC;

(b) any tax payable in accordance with the determination is payable in accordance with paragraph 32.

(6) Interest is to be incurred on amounts payable in accordance with those paragraphs.

(7) Where a party to an appeal to the tribunal makes a further appeal, tax is to be payable or repayable in accordance with the determination of the tribunal or court (as the case may be), even though the further appeal is pending.

(8) But if the amount charged by the assessment is altered by the order or judgment of the Upper Tribunal or court, then—

(a) if too much tax has been paid, the amount overpaid must be refunded, with any interest allowed by the order or judgment, and

(b) if too little tax has been charged, the tax is payable in accordance with paragraph 32.

(9) The determination of the tribunal is final and conclusive except as otherwise provided in sections 10 to 16 of the Tribunals, Courts and Enforcement Act 2007.

Postponement of payment pending appeal U.K.

63 (1) The general rule is that an appeal under this Part of this Schedule does not postpone any liability to pay multinational top-up tax.

(2) Accordingly, the periods within which tax is payable under paragraph 32 continue to apply notwithstanding an appeal.

(3) But a liability may be postponed if—

(a) a determination is made by HMRC to that effect;

(b) a direction is made by a tribunal to that effect;

(c) HMRC and the appellant agree to a postponement.

(4) The effect of a liability being postponed is that the period within which the tax is payable is extended by the period of the postponement.

(5) The period of the postponement—

(a) may not begin after the date the appeal is determined;

(b) is to end on the date the appeal is determined.

64 (1) The appellant may apply to HMRC for a determination if the appellant has grounds to believe that—

(a) a person has been overcharged to multinational top-up tax;

(b) an amount of tax postponed under a previous determination is excessive or insufficient.

(2) An application must be made within 30 days after the specified date (see paragraph 55(4)), unless sub-paragraph (3) applies.

(3) This sub-paragraph applies if—

(a) there is a change in the circumstances of the case as a result of which the appellant has grounds to believe the matter in sub-paragraph (1), or

(b) the application could, if it were a notice of appeal, be given at a later date under paragraph 55(6).

(4) The application must state the amount believed to be overcharged and the grounds for that belief.

(5) HMRC may determine—

(a) whether any amount of tax is to be postponed, and

(b) the amount of any tax postponed.

(6) The amount of any tax postponed is to be determined as the amount (if any) by which it appears that there are reasonable grounds for believing that the person is overcharged.

65 (1) The appellant may apply to the tribunal for a direction if—

(a) the appellant has applied to HMRC for a determination,

(b) HMRC has made a determination, and

(c) the appellant does not agree with the determination.

(2) The tribunal may direct whether the determination of HMRC was correct.

(3) A decision of the tribunal under this paragraph is final and conclusive (despite the provisions of sections 12 and 15 of the Tribunals, Courts and Enforcement Act 2007).

66 (1) HMRC and the appellant may agree that payment of an amount of tax should be postponed pending the determination of the appeal.

(2) The agreement may modify a determination by HMRC under paragraph 64.

(3) Where the agreement does so, it is to be treated in the same way as a settlement agreement under paragraph 61.

(4) The consequences of an agreement are to be the same as if the tribunal had, at the time when the agreement was entered into, made a direction to the same effect as the agreement.

(5) The existence of an agreement does not preclude a further determination by HMRC or direction by the tribunal modifying the agreement.

(6) An agreement—

(a) must be made in writing;

(b) may be made with a person acting on behalf of the appellant in relation to the appeal.

Special provisions as to penalties U.K.

67 (1) This paragraph applies to an appeal as to—

(a) whether a penalty under paragraph 42, 43 or 46 is payable;

(b) the amount of such a penalty.

(2) Payment of the penalty is always postponed pending determination of the appeal.

(3) Accordingly—

(a) paragraphs 63(1) to (3) and 64 to 66 do not apply to such an appeal;

(b) paragraphs 63(4) and (5) always apply to such an appeal.

(4) If the appeal is notified to the tribunal, the tribunal may—

(a) confirm a decision of HMRC;

(b) substitute for the decision another decision that HMRC had power to make.

(5) The tribunal may only make a decision that HMRC had power to make under paragraph 49 (reduction of penalties) if the tribunal considers HMRC’s decision to have been flawed when considered in light of the principles applicable in proceedings for judicial review.

(6) On determination of the appeal, where a penalty is payable it is to be paid before the end of 30 days beginning with the day on which the determination was issued.