SACM10010 - Unsuccessful Attempts to Make a Claim or Election: Unsatisfactory Claims

Throughout this manual legislative references are to the Taxes Management Act 1970 (TMA70), unless otherwise stated.

If a taxpayer has tried to make a claim within the relevant time limit but the claim is deficient or unsatisfactory in some way, then they have not made a claim.

The position is similar to that where a person files an unsigned SA return. That return is not valid as it does not contain a signed declaration as required by S8(2).

Some examples of unsatisfactory claims are

  • claims that are not made in the prescribed format or on the prescribed form. For example, the form HS295 must be used to claim Hold-Over relief
  • claims where the amount of relief or allowance is not quantified. Quantified mean the claims is expressed in figures, see SACM3025 for more information. However, if the claim is for a set amount, such as personal allowances, then the taxpayer does not need to state the amount; and in a claim to alter a PAYE code the amount does not need to be quantified. It is not acceptable to express the claim as a formula, see S42(1A) & (3)
  • claims where it is unclear how the relief is to be used
  • claims for relief for maintenance or alimony payments where no date of birth is given to demonstrate that one party was 65 or over on 5 April 2000, and
  • claims made outside a return where a notice to deliver a return has been issued (other than claims to carry back loss relief or RAR/PPP, see S42(2).

Each different claim or election will have different requirements or criteria. A claim must be quantified and give sufficient information to enable it to be processed. The information required will generally include

  • the nature of the relief or allowance claimed
  • the year for which relief is claimed, and
  • the amount of the claim.

A claim that is for a set amount such as a Personal Allowance is already quantified and so the claimant does not have to state the amount; however, he will have to say for which year the claim is being made. Compare that with a claim to carry back trading losses. The claimant will need to state the source that gave rise to the loss, the amount of the loss, the year in which the loss arose, the amount to be carried back as well as the year to which it is to be carried back.

In some instances, the claimant may not be able to choose the year to which the loss is to be carried back as the legislation may stipulate what is to be done to give effect to the claim.

See below for unsatisfactory claims made in a return and/or claims made outside a return.

Unsatisfactory claim made in a return

If the unsatisfactory claim is made in a return then it may be possible to correct it as an obvious error under S9ZB. It the taxpayer rejects the correction, or one is not possible, the claim can be challenged by opening an enquiry into the return under S9A or S12AC. Although they have not made a claim they will have delivered a valid return and the correct way to challenge a figure in that return is by opening an enquiry.

Unsatisfactory claims made outside a return

Where an unsatisfactory claim is made outside a return, you should explain to the person that they have not made a valid, statutory claim and what they can do now. As there is no statutory claim you cannot enquire into it under the statutory provisions at Schedule 1A Para 5.

If you are writing to the person as there is a deficiency in the claim just before the end of the time limit for making the claim, you should give them a reasonable extension of time to make a proper claim. 14 days would usually be appropriate but if there are particular circumstances that mean 14 days would be insufficient (for example, the customer being overseas) then you can allow a longer reasonable amount of time.

Giving the person an extension of time to provide further information in support of the attempted claim does not extend the statutory time limit for making the claim. If the claim is made within the extended time period but after the statutory time limit has passed, this will not be a statutory claim but we may be able to give some relief. This means that you cannot use formal powers to enquire into the claim and, you must satisfy yourself that the claim would otherwise be valid before granting any relief.

If you need to ask any questions you may do so on an informal basis. Acceptance of the attempted claim will be dependent on a satisfactory response.

If you are satisfied that the claim would have been accepted if it had been made in time, and we accept the reason for the claim being made late, you can give an amount of relief equivalent to that which would have been due had it been made in time. Write to the customer informing them of any such action taken.

Alternatively, If the claim would not have been accepted if it had been made in time, explain to the person that we accept their reason for the claim being made late but it cannot be accepted due to the claim not meeting the conditions for relief to be given.

When inviting the person to provide further information, tell them that if HMRC reject a claim made after the statutory time limit, they will not have the right to appeal the decision.