SACM10040 - Unsuccessful Attempts to make a Claim or Election: Late Claims - Who Decides Whether to Accept and How

Legislation sometimes allows claims or elections to be made after the statutory time limit if HMRC makes an assessment or amends a self assessment return increasing the amount of tax charged. SACM9005 deals with these ‘consequential claims’. For all other late claims and elections follow the guidance on this page.

If a person tries to make a late claim or election explain that they are out of time.

If the person wants HMRC to consider allowing them to make a late claim or election, ask them to explain why they did not make it in time and any reasons which they think HMRC should consider when deciding whether to accept a late claim or election. This should include, but is not limited to, why they believe they are entitled to the relief and how they meet the conditions for relief.

Then check the guidance relating to that claim or election to see whether it is one that has to be sent to the appropriate technical specialist for any decision on whether to accept a late claim.

If you do not need to refer the claim to a specialist the decision on whether or not to accept it can be made locally. Your office management will tell you who can take such decisions.

How do I make the decision

You must

  • follow any specific guidance about the type of claim or election you are dealing with, and
  • consider seeking advice from the technical specialist with responsibility for the specific claim.

You can only make the decision about a late claim or election if it does not need to be referred to a specialist and if your office management has given you this function.

The following points may help you consider how you approach using discretion to make the decision but they should not be seen as exhaustive. All available information should be taken into account when making the decision.

Is the claim late because of an error by HMRC or another government department?

Extra-statutory concession (ESC) B41 applies to all statutory claims and elections relating to corporation tax and income tax. Late claims or elections relating to capital gains tax can also be accepted if they meet these terms.

The concession says

‘repayments of tax will be made in respect of claims made outside the statutory time limit where an overpayment of tax has arisen because of an error by HMRC or another government department, and where there is no dispute or doubt as to the facts.’

For example, you might accept a late claim under ESC B41 where, before the time limit for making the claim, an HMRC officer

  • told a person that they could make a claim or election later than the statutory time limit, or
  • wrongly advised them that a claim or election was not possible, where the officer ought to have known, from the information given to them, that this advice was incorrect.

If an error like this comes to a person’s attention, they must notify HMRC as soon as they reasonably can that they will want to make a late claim.

Did the person tell us, within the normal time limit, that they intended to make the claim or election?

It is not possible for a person to avoid a time limit by simply telling us they intend to make a claim or election later. If a person tries to make a claim or election in time but it is deficient or unsatisfactory in some way, see SACM10010, explain to the person that they have not made a valid claim or election and what they need to do to make a valid one.

If you are writing to the person to invite a valid claim or election after or just before the end of the time limit for making it, give the person a reasonable extension of time to send you a proper claim or election. The 14 days that we use when we send back unsatisfactory return forms would usually be appropriate. If there are particular circumstances that mean 14 days would be insufficient, for example, the person being overseas, then you can allow a longer reasonable amount of time.

Is the claim or election late for reasons beyond the person’s control?

HMRC will not accept a late claim or election unless the reasons it was late were beyond the person’s control.

This should not be confused with ‘reasonable excuse’, see S118(2) which does not apply to late claims or elections. See Raftopoulou v HMRC [2018] EWCA Civ 818.

You can accept a late claim or election if

  • a person was unable to deal with their tax affairs due to illness or other good reason, and
  • the illness or other cause prevented them making the claim or election within the time limit and prevented them from seeking assistance.

You can also accept a late claim, but not a late election, if all the income, profits or gains affected by the claim depended on the outcome of discussions between the person and HMRC which had started but were not complete before the time limit, and the delay in agreeing the figures was not substantially the fault of the person or their agent and could not have reasonably been avoided.

You must not accept a late claim or election where it is substantially due to

  • oversight or negligence on the part of the person, their agent or adviser
  • any mistakes concerning the meaning of legislation, or how it is interpreted by HMRC
  • illness or absence of an agent or adviser, or
  • wishing to avoid commitment until the effect of the making the claim or election is clearer.

Provisional figures

A claim or election can be made using provisional figures if precise figures are not available before the time limit expires, see SACM5010 for conditions. You should not accept a late claim or election if the delay was due to the person wanting to have precise figures before making any claim or election.

Is there an avoidance scheme?

If a late claim or election forms part of a scheme or arrangement, the main purpose or one of the main purposes of which is the avoidance of tax (including the payment of tax), you may take this into account when deciding whether to accept the late claim or election.

Other considerations

Before making a decision about accepting a late claim, check the requirements and conditions for the claim or election to ensure the claim would be accepted if it had been made in time. Further documents may be requested or questions can be asked of the person to ascertain this information. You must make it clear that you are requesting information and documents on an informal basis in order to make an informed decision, and the person is not under any obligation to answer. However, we should make it clear that in the absence of a reply or the relevant documents we will not be able to consider the late claim further and it may not be accepted.

It is very important that all relevant considerations are taken into account when making a decision and there may be exceptional cases which are not covered by guidance concerning the particular claim or election, where it may still be unreasonable for HMRC to refuse a late claim or election.

Individual factors in isolation may not seem exceptional, but when viewed collectively the circumstances of the case could be considered to be exceptional.

If you are unsure about a case, ask your manager for a second opinion.

Internal Staff
​​​​​​​If you think a claim or election should be accepted because of other considerations and there is no guidance regarding the particular late claim or election, or in any other cases of doubt, you can contact TALA. The contact details for TALA can be found on Sharepoint, search Tax Administration Litigation & advice (TALA).

Explain your decision

Write to the person telling them clearly

  • what your decision is
  • if you cannot accept the late claim or election, explain why. Your letter must cover all of the points mentioned above, as well as any other points considered, clearly explaining to the customer that you have done so and why you believe that each factor does not apply
  • that there is no right of appeal against HMRC’s refusal to accept a late claim.

See SACM10045 if the person wants to disagree with your refusal of the claim.