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CLAUSE 88: REPAYMENT SUPPLEMENTS: CLAIM FOR RELIEF INVOLVING TWO OR MORE YEARS

SUMMARY

1. This clause provides for repayment supplement to be paid on   repayments resulting from claims for relief in respect of the carry back of loss relief or pension contributions, and the averaging of profits of farming, creative artists, etc.

DETAILS OF THE CLAUSE

2.      Subsection (1) provides for Section 824 of the Taxes Act 1988 to be amended.

3.      Subsection (2) inserts a new subsection (2C) in section 824.

New subsection (2C) specifies that subsection 824(1), which provides for payment of repayment supplement, shall apply to a repayment resulting from a claim for relief under paragraph 2 of Schedule 1B of the Taxes Management Act, which relates to a claim for relief for losses, or payments made, to be given in an earlier year; under paragraph 3 of Schedule 1B, which relates to a claim for relief for fluctuating profits of farming etc; and under Schedule 4A of this Act, which relates to a claim for relief for fluctuating profits of creative artists etc.

4.      Subsection (3) inserts a new paragraph (ab) in subsection (3) of section 824, specifying that, for a repayment resulting from a claim for relief under the provisions mentioned in new subsection (2C), the ‘relevant time’ from which repayment supplement is payable as provided for in section 824(1) is the 31 January following the year which is the later year in relation to the claim.

5.      Subsection (4) provides that this section applies in relation to repayments made after the passing of this Finance Act.

BACKGROUND NOTE

6. This Clause gives legal backing to a concession under which interest is added to repayments which arise for example when relief from one year is carried back against income of an earlier year, for example, where a taxpayer elects to carry back losses or relief for pension contributions to an earlier year, . Currently, legislation does not allow repayment supplement to be added where the relief results in a repayment, and so repayment supplement is not strictly due. However by concession supplement has been paid from 31 January following the later year, and this measure will give taxpayers a legal right to supplement.