Finance Act 1996

29 (1) Where, due to an error on the part of the Commissioners, a person— U.K.

(a) has paid to them by way of tax an amount which was not tax due and which they are in consequence liable to repay to him,

(b) has failed to claim payment of an amount to the payment of which he was entitled in pursuance of provision made under section 51(2)(c) or (d) or (f) of this Act, or

(c) has suffered delay in receiving payment of an amount due to him from them in connection with tax,

then, if and to the extent that they would not be liable to do so apart from this paragraph, they shall (subject to the following provisions of this paragraph) pay interest to him on that amount for the applicable period.

[F1 (1A) In sub-paragraph (1) above—

(a) the reference in paragraph (a) to an amount which the Commissioners are liable to repay in consequence of the making of a payment that was not due is a reference to only so much of that amount as is the subject of a claim that the Commissioners are required to satisfy or have satisfied; and

(b) the amounts referred to in paragraph (c) do not include any amount payable under this paragraph.]

(2) The applicable period, in a case falling within sub-paragraph (1)(a) above, is the period—

(a) beginning with the date on which the payment is received by the Commissioners, and

(b) ending with the date on which they authorise payment of the amount on which the interest is payable.

(3) The applicable period, in a case falling within sub-paragraph (1)(b) or (c) above, is the period—

(a) beginning with the date on which, apart from the error, the Commissioners might reasonably have been expected to authorise payment of the amount on which the interest is payable, and

(b) ending with the date on which they in fact authorise payment of that amount.

[F2 (4) In determining the applicable period for the purposes of this paragraph there shall be left out of account any period by which the Commissioners’ authorisation of the payment of interest is delayed by the conduct of the person who claims the interest.

F2 (4A) The reference in sub-paragraph (4) above to a period by which the Commissioners’ authorisation of the payment of interest is delayed by the conduct of the person who claims it includes, in particular, any period which is referable to—

(a) any unreasonable delay in the making of the claim for interest or in the making of any claim for the payment or repayment of the amount on which interest is claimed;

(b) any failure by that person or a person acting on his behalf or under his influence to provide the Commissioners—

(i) at or before the time of the making of a claim, or

(ii) subsequently in response to a request for information by the Commissioners,

with all the information required by them to enable the existence and amount of the claimant’s entitlement to a payment or repayment, and to interest on that payment or repayment, to be determined; and

(c) the making, as part of or in association with either—

(i) the claim for interest, or

(ii) any claim for the payment or repayment of the amount on which interest is claimed,

of a claim to anything to which the claimant was not entitled.

F2 (5) In determining for the purposes of sub-paragraph (4A) above whether any period of delay is referable to a failure by any person to provide information in response to a request by the Commissioners, there shall be taken to be so referable, except so far as may be provided for by regulations, any period which—

(a) begins with the date on which the Commissioners require that person to provide information which they reasonably consider relevant to the matter to be determined; and

(b) ends with the earliest date on which it would be reasonable for the Commissioners to conclude—

(i) that they have received a complete answer to their request for information;

(ii) that they have received all that they need in answer to that request; or

(iii) that it is unnecessary for them to be provided with any information in answer to that request.]

(7) The commissioners shall only be liable to pay interest under under this paragraph on a claim made in writing for that purpose.

[F3 (8) A claim under this paragraph shall not be made more than [F4 4 years] after the end of the applicable period to which it relates.]

[F5 (9) References in this paragraph—

(a) to receiving payment of any amount from the Commissioners, or

(b) to the authorisation by the Commissioners of the payment of any amount,

include references to the discharge by way of set-off (whether in accordance with regulations under paragraph 42 or 43 below or otherwise) of the Commissioners’ liability to pay that amount.]

(10) Interest under this paragraph shall be payable at the rate applicable under section 197 of this Act.

Textual Amendments

F1 Sch. 5 para. 29(1A) inserted (retrospective to 29.4.1996) by 1997 c. 16, s. 50(1), Sch. 5 Pt. III para. 11(2)

F2 Sch. 5 para. 29(4)(4A)(5) substituted (19.3.1997 with effect as mentioned in Sch. 5 Pt. III para. 12(2) of the amending Act) for para. 29(4)-(6) by 1997 c. 16, s. 50(1), Sch. 5 Pt. III para. 12(1)

F3 Sch. 5 para. 29(8) substituted (retrospective to 29.4.1996) by 1997 c. 16, s. 50(1), Sch. 5 Pt. III para. 11(3)

F4 Words in Sch. 5 para. 29(8) substituted (1.4.2010) by Finance Act 2009 (c. 10), s. 99(2), Sch. 51 para. 39; S.I. 2010/867, art. 2(1) (with art. 25)

F5 Sch. 5 para. 29(9) substituted (retrospective to 29.4.1996) by 1997 c. 16, s. 50(1), Sch. 5 Pt. III para. 1(4)