ESIM4300 - Official error: the meaning of official error

There is no statutory definition of an official error within schedule 3 FA 2001, the word therefore takes on its natural and everyday meaning (as is the case with VAT). HMRC has historically taken this to mean where a business has been financially disadvantaged by official action. If however HMRC make a decision which later turns out to be wrong because the taxpayer provided incorrect information, then we would contend that statutory interest is not due as the error was solely due to the taxpayer.

There is no official error case law involving excise statutory interest however the equivalent VAT guidance cites some useful examples where the tribunal considered the meaning of error. These may be of assistance as the principles are the same, see VSIM3100.

FA2001