IHTM31720 - Assessing: other repayment issues: provisional repayments

Whenever

• it appears that tax has been overpaid, but
• the case is not ready for final calculation

you should always consider making a provisional repayment, even if the taxpayer or agent has not specifically asked for one.

When considering whether we should make a provisional repayment, you should weigh up:

• the fact that it is undesirable for us to keep money on deposit that is substantially more than the expected liability, with.
• the need to make sure that the interests of HMRC are not prejudiced.

The taxpayer or agent will usually ask for, or should be offered an interim repayment, where:

• We have agreed an amendment, deduction or allowance, which by itself would lead to a repayment. But, other matters that may affect the tax amount of payable are still open.
• We have agreed in principle that an amendment that would result in a substantial repayment is due, but the exact amount has not yet been quantified; and the taxpayer or agent has asked for a repayment.
• The taxpayer or agent has overpaid tax on delivery of the IHT400, because:

• they made a mistake about the facts
• they did not deduct a relief or exemption that was due
• they made a substantial arithmetical error.

If you think that a provisional repayment should be made you should speak to your manager.

Provisional repayment not appropriate

You should not normally issue a provisional repayment where the amendment has not been

• established in principle. or
• quantified in amount.

Again, consult your manager if the taxpayer or agent asks for a provisional repayment, but you do not consider it is appropriate.