home | news | site index

CLAUSE 31:  REPAYMENTS OF OVERPAID LEVY

SUMMARY

1.         Clause 31 provides for repayment of overpaid levy and enables the Commissioners, by regulations, to prescribe the form and manner of any claim to repayment.

DETAILS OF THE CLAUSE

2.         Subsection (1) provides for repayment of overpaid levy (levy paid which was not due).

3.         Subsection (2) requires a claim to be made prior to any repayment.

4.         Subsection (3) provides for regulations to specify the form and manner of such a claim and the documentary evidence required.

5.         Subsection (4) makes the above provisions subject to those of Clause 32 below.

6.         Subsection (5) limits the liability of the Commissioners to make repayments of overpaid levy to that provided for by this clause.

SCHEDULE 8

AGGREGATES LEVY:  REPAYMENTS AND CREDITS

Paragraph 1.  Reimbursement arrangements

This paragraph enables the Commissioners to make regulations whereby reimbursement arrangements for neutralising the unjust enrichment barrier in section 32(2) can be disregarded except where those arrangements contain certain provisions, are supported by certain undertakings and certain other matters are satisfied.

Paragraph 2.  Interest payable by the Commissioners

This paragraph provides that in circumstances where, due to an error by the Commissioners, a person either:

• has paid an amount of levy which was not levy due, and as a result is entitled to a refund, or
  
  
• has failed to claim a repayment for a tax credit to which he was entitled under any tax credit regulations, or
  
  
• has suffered a delay in receiving payment of an amount due from the Commissioners in connection with the levy then, if and to the extent to which the Commissioners would not be liable to pay interest apart from under this paragraph, they shall be liable to pay interest on that amount for the relevant period.

Furthermore, the paragraph provides various definitions and provides that certain factors outside the Commissioners’ control shall be disregarded so that interest will not be due in those circumstances.

Paragraph 3.  Assessment for excessive repayment

This paragraph provides that where the Commissioners have repaid aggregates levy, and the repayment exceeds the amount properly due, then the excess may be recovered by means of assessment

Paragraph 4.  Assessment for overpayments of interest

This paragraph provides that, where an amount of interest has been paid to a person under paragraph 2 and the person was not entitled to that amount under that paragraph, the Commissioners may assess the amount using their best judgement, with a view to recovery.

Paragraph 5.  Assessments under paragraphs 3 and 4

This paragraph provides a time limit for making an assessment under paragraphs 3 and 4.  The limit is two years after the Commissioners are satisfied that they have sufficient evidence to warrant making such an assessment.  Once assessed and notified,  the amount shall be recoverable as if it were levy due although  not to the extent that  the assessment has been reduced or withdrawn.

Paragraph 6.  Interest on amounts assessed 

Where assessments are made to recover excessive repayments or overpayments of interest, the whole of the amount assessed shall carry interest at either the ordinary or the penalty rate.  The period of charge runs from the day after the person is notified of the assessment to the day before the day on which the amount assessed is paid.    Penalty interest applies generally to tax credits claimed without entitlement.  Other assessments shall only be subject to ordinary interest. Such interest is to be paid without any deduction of income tax.  Penalty interest is compound interest calculated at the penalty rate, and calculated on a daily basis but added to the principal once a month.  The penalty rate is the ordinary interest rate under section 197 of the Finance Act 1996 plus 10 percentage points.

The Commissioners (or an appeal tribunal) may reduce the penalty interest to any amount including nil.  Furthermore where a person satisfies the Commissioners (or an appeal tribunal) that there is a reasonable excuse for conduct giving rise to the liability to pay penalty interest, this reasonable excuse may be taken into account in determining any reduction.  In  considering whether there is a reasonable excuse, certain matters such as insufficiency of funds, actual loss of levy and good faith are irrelevant.

An appeal tribunal may cancel any reduction previously made by the Commissioners.

Paragraph 7.  Assessments to interest under paragraph 6

Where a person is liable to interest the Commissioners may assess and notify him.  Interest under this paragraph may go back no further than two years from the date of the assessment.  An amount assessed is recoverable as if it were levy due, but not to the extent that it has been reduced or withdrawn.  Any assessment under paragraph 6 must specify a date to which the amount of interest is calculated.  If interest continues to accrue, further assessments can be made.  However, the Commissioners may also provide a date for payment on an assessment and, if the interest is paid by that date, no further interest shall accrue.

Paragraph 8.  Supplementary assessments 

Where the amount assessed to recover an excessive repayment, overpaid interest or as interest on such an assessment is too low, then a supplementary assessment may be made to recover  the excess subject to the original time limit.

Paragraph 9.  Set-off of or against amounts due under this Schedule

This paragraph provides for regulations to make provision for setting off amounts when a person owes levy but Customs and Excise are liable to repay levy or other taxes or duties under their care and management.

Paragraph 10.  Set-off against other taxes and duties

This paragraph provides for regulations to make provision for setting off amounts when a person owes other taxes or duties under the care and management of Customs and Excise, but the Commissioners are liable to repay aggregates levy to that person.

Paragraph 11.  Restriction on powers to provide for set-off

Regulations under paragraphs 10 and 11 shall not require the “credits” to be set-off against “debits” in certain cases involving insolvency procedures.

Paragraph 12.  Supplemental provisions of Schedule

Notifications of assessments under provision of this Schedule to a person’s representative shall be treated as notification to the person in relation to whom the representative acts.  “Representative” in relation to any person includes that person’s personal representatives, trustee in bankruptcy, liquidator, receiver and tax or other representative.