Refusal of repayment claims
HMRC has now issued a note setting out its policy on repayment claims in cases where it believes there is tax avoidance.
HMRC’s problem is that tax enquiries can go on for years. If tax has been repaid, e.g. on a loss claim, it is not repayable unless and until HMRC agrees the position.
HMRC’s view is that people involved in tax avoidance should not gain a tax advantage, even if only on timing.
Accordingly HMRC will withhold income tax repayments where the claims which produce them constitute (in its opinion) tax avoidance and where HMRC is challenging (or considering challenging) those claims.
Date: 28th October, 2013
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