EAIG11200 - Time limits for other excise assessments: exceptions to the normal four and twenty year time limits
Time limits for assessments made under Finance Act 1997 Schedule 5 paragraph 14 to recover excess repayments.
Assessments made to recover excess repayments by HMRC are not caught by any ‘capping’ provisions such as the four-year rule that attaches to most excise assessments. Instead, you have two years from receipt of sufficient evidence of facts in which to make your assessment. Finance Act 1997 Schedule 5 paragraph 16 refers.
The two years will run from the date you have quantified the erroneous payment and are in a position to make your assessment to best judgement. This two-year rule contrasts with the one year evidence of facts rule for most other assessments.
Therefore, where a claim is paid and it turns out that the facts upon which the claim was paid were wrong, you have two years from the date on which those new facts came to HMRC’s knowledge to make an assessment to recover it. If you are making an assessment under this time limit, it does not matter how long ago the payment was made.
Please note that the word ‘facts’ is given its natural meaning, regardless of context, and so does not include the legal effect of either a statute or a judicial decision. Consequently we cannot rely on a Courts decision as evidence of facts for the purpose of the Schedule 5 paragraph 16(1) time limit.