# 4 year rule for refunds - some crazy decisions



## Graham_07 (23 Jul 2010)

A bit off thread but a colleague told me of a case recently. Taxpayer was owed a refund of tax  for 2005 , they also owed Revenue a balance for 2004  and were further owed a refund of tax for 2009. The refund for 2005 was disallowed under the 4 year rule. The liability for 2004 ( also outside the 4 years but irrelevant ) was collected by reducing the 2009 refund and the taxpayer got the balance. Try explaining the logic of that to the taxpayer he said to me.


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## Brendan Burgess (23 Jul 2010)

Hi Graham

i have moved this from another thread as it is off topic, but also deserves a thread on its own. 

I was speaking to someone who is also dealing with MABS. The Revenue is chasing her for a recent underpayment while rejecting her claim for the old refund. 

Is it time to change the law on this and extend the time? 

It seems bizarre although, for administrative reasons, I would accept it for small amounts. 

Brendan


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## Graham_07 (23 Jul 2010)

The relevant legislation is Section 865 of the Taxes Consolidation Act 1997. Link  to a [broken link removed]article on same. 


The actual legislation is at Part 37 on [broken link removed]

Revenue have reduced the time for refunds yet can pursue taxes, almost indefinitely. I am sure there is a lot of unclaimed tax and assessed refunds not being paid as a result of this rule. 

I have, in fact only today received a Notice of Assessment on a case for 2004 where  Revenue charged the 10% late filing surcharge to the liability. Then deducted the total liability from the tax paid ( which was greater) , leaving a net refund to the taxpayer of over €1,000 and then refused to pay it with the words 

      "this repayment may not be due in accordance with S.865 TCA 1997."


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## papervalue (23 Jul 2010)

A lot of these decisions have no common sense at all. I have noticed they always chase payments but could leave refunds reseting and if nothing said, a client might never get some refunds back

Simple example a person owed 1k for 2007 and exactly 1k refund on system for 2006- They send out demanding letters/ sheriff threat looking for 1k money when all they had to do was basic contra, defies logic how the balances are not offset/cleared before any demand issues.

In regard to your case, if refund on ros shows up, I would continue to push for it. We should ask the question why they have not issued refunds resting on system

Also lately i have also noticed that if you put a loss back claim on ct1, the majority of time they are now ignoring it till you phone up.

I wish they do more to issue genuine refunds than delaying/ignoring them

Actually what happened in your example ignores the whole taxpayer treatment charter . I have to say an example like that would really annoy me.

But- I know of a vat case this week where a refund for 2004 on system is going to be credited against current year so sometimes/ a lot of time it is down to who is dealing with case on phone etc.

I think to conclude revenue should now look at the ros registration balance for all clients and any refunds on system should be investigated and if genuine offset/refund money( say from 2002 to 2006 for eaxample) as if you want to voluntary strike off a company you would still have to pay a 2002 tax bill say for corp tax for €200 even if that was 8 years ago and you cant remember why balance not paid/even due


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## Satanta (23 Jul 2010)

From a logical point of view, this one has never made much sense. 

I can understand why it was introduced from a logistical stand point, but while it does cut down on the administration requirements of the department, when you hear of the individual cases such as these, you are left wondering if the ends justify the means and scratching your head slightly.



Brendan Burgess said:


> Is it time to change the law on this and extend the time?


It begs the question will this actually resolve the issue. If the time on refunds were extended to 10 years (just a random figure plucked out of the air, not a suggestion by any means), would we end up in a situation where we find the same anomalies occurring? (money owed on an underpayment from 7 years ago [or 12 years ago] but refund refused for an overpayment 11 years ago)

Having said that, extending the time would significantly reduce the number of occurrences of this so potentially still worth considering. I just wonder what the logistical/administration cost of extending it might be.


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## papervalue (23 Jul 2010)

Brendan Burgess said:


> Hi Graham
> 
> i have moved this from another thread as it is off topic, but also deserves a thread on its own.
> 
> ...



That above to me does not make any sense. It is a simple adjustment to do contra on revenue system and them pursue any shortfall.

The person revenue are chasing above should agree to pay the difference, and let revenue take to court for balance if they want(love to see what a judge would make of it) They have money on hand but will not credit it, defies logic.

I have seem a case where a company owes a substantial amount in one tax([paye/prsi) while they issue a refund for another tax(vat) without doing an offset(might as well be given money away sometimes)


Finally the person involved should not be to worried. If taxman attitude is like that personally be less inclined to do any short term deal but do over longer period.


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## mandelbrot (24 Jul 2010)

Just going to play devil's advocate here. The system is self-assessment, so where a taxpayer is due a refund arguably some kind of time limit must be put in place for claiming said refund?

By the same token, given that the system is self-assessed it would be unfair to insist that revenue be constrained as to the periods up to which they can pursue liabilities, the declaration of which was the responsibility of the taxpayer, as that would encourage evasion.

It's also possible that the revenue computer system won't allow the user to do the kind of contra that has been mentioned several times. There are likely to be "stops" in place which it may be nearly impossible to get around.

Personally I agree that the examples above appear very unfair, but as I said, just playing devils advocate..!


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## becky (24 Jul 2010)

mandelbrot said:


> Just going to play devil's advocate here. The system is self-assessment, so where a taxpayer is due a refund arguably some kind of time limit must be put in place for claiming said refund?
> 
> By the same token, given that the system is self-assessed it would be unfair to insist that revenue be constrained as to the periods up to which they can pursue liabilities, the declaration of which was the responsibility of the taxpayer, as that would encourage evasion.
> 
> ...


 
Easy enough to change the computer system I'd say.  I can understand a time limit for small amounts but if you have underpaid one year and overpaid another year the revenue should be allowed to use some common sense.

I made 3 claims one year.  I had underpaid tax by €300 in year one and overpaid in year 2 and 3 by a total of €1500.  They could have offset the underpayment against the overpayment but for some reason didn't, so I was up. Crazy I thought.


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## Brendan Burgess (24 Jul 2010)

becky said:


> I had underpaid tax by €300 in year one and overpaid in year 2 and 3 by a total of €1500.  They could have offset the underpayment against the overpayment but for some reason didn't, so I was up. Crazy I thought.



Surely the underpayment still stands in your account and you owe the money? 

The fact that the IT systems were unable to calculate the net position, does not allow you off the liability.


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## Moral Ethos (24 Jul 2010)

Revenue will sometimes forget about it. 

I am surprised that no one has challenged them in the courts over their refused refunds.


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## becky (24 Jul 2010)

Brendan Burgess said:


> Surely the underpayment still stands in your account and you owe the money?
> 
> The fact that the IT systems were unable to calculate the net position, does not allow you off the liability.


 
It was the tax year 2004 so I expect (hope) it's written off now.  That said I always meant to check it as I was expecting a refund for that year.  It went out of my head after a while.

I realised the IT systems wouldn't do the net but I would have thought the person in the revenue would have seen the underpayment against my record and offset it manually.


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## Graham_07 (25 Jul 2010)

papervalue said:


> A lot of these decisions have no common sense at all. I have noticed they always chase payments but could leave refunds reseting and if nothing said, a client might never get some refunds back
> 
> Simple example a person owed 1k for 2007 and exactly 1k refund on system for 2006- They send out demanding letters/ sheriff threat looking for 1k money when all they had to do was basic contra, defies logic how the balances are not offset/cleared before any demand issues.



These types of situations happen a lot and I have encountered letters coming out from Debt Management in Revenue looking for underpayments. These letters have printouts attached showing the underpayment. The letter is signed with a name ( not just a computer generated thing ) . Then when I check ROS I see that maybe a payment by the client has gone into a wrong year and year one is overpaid by the exact amount due on year 2. Now fair enough for computer generated correspondence and yes, as other have said, stops may be in place to prevent automatic set-off, but these letters have had to be done with actual human input. Surely if I can look at ROS and see the mistake why do the staffers sending out these letter not do the same? I end up having to ring, point it out to them, then fax or email a request for set-off, ( as this cannot be done just on a whim by the staffer ). The time wasted on this sort of thing is very annoying.  

I agree with the other poster, about paying the difference and let them pursue any balance. If it is showing on the system it should be taken into account.


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## T McGibney (26 Jul 2010)

mandelbrot said:


> Just going to play devil's advocate here. The system is self-assessment...



The four year rule applies to all taxes, not just self-assessed taxes. It arguably affects PAYE taxpayers far more than self-assessed taxpayers, as the latter are obliged to file annual tax returns and by doing so they can claim all their entitlements to allowances, credits etc as a matter of course.


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## Eldorado (26 Jul 2010)

Does the 4 year rule not apply to making of returns and assessments (S955)?  If a return is made within the 4 years and a notice of assessment has been made showing a refund the time limit does not seem to apply.  I could be wrong but that would be my understanding of the legislation.


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## Eldorado (26 Jul 2010)

Apologies I note this thread is about section 865 not section 955 but point is same.  Legislation seems to refer to time limits on making claims not on refunding tax


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## mandelbrot (28 Jul 2010)

OK I'm back for another touch of Satanic Advocacy..!

Yes, the time limit refers to making a claim; I'm not actually clear as to what exactly constitutes making a claim though?

Is the return itself (taking the example of income tax since this is the  one most frequently cited in the earlier posts), deemed to be a claim  for repayment, or does the taxpayer need to subsequently request  repayment / offset?

In any case where Revenue have received a claim for repayment they  absolutely should have made the repayments, but if a claim to repayment  isn't made then surely the taxpayer (or their agent!) has to take some  of the blame? There's a lot of talk about contras in some of the posts  here, but surely money is sitting on a taxpayer's account as an  overpayment is not Revenue's money, and they therefore have no authority  to do anything with it without instruction from the taxpayer. If they  did start moving people's money around you can be sure there would be  uproar (same as if the bank moved money belonging to you from one  account to another.)

Again, it's a self assessed system; with widespread access to ROS, and  paper assessments / statements issuing from Revenue to taxpayers (and  their agents!), then it's a bit rich to turn around 4 years on and blame  Revenue, when the existence of the overpayment is there for the  taxpayer (or their agent!) to see, and claim, at any point during those 4  years.

In Graham's original example he says he received a 2004 Notice of  Assessment, which resulted in an overpayment that Revenue aren't going  to issue. I find it hard to sympathise with a taxpayer who is sending in  their return nearly 5 years after it's due date. To be fair you could  have sent it in, what, 3 years late and still validly claimed the  repayment! If someone is that remiss in keeping up their end of the deal  then I suppose that is a consequence they have to face.


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## Eldorado (28 Jul 2010)

A valid claim is defined in section 865 as being 


> a statement or return which is required to be delivered by the person in accordance with any provision of the Acts for a chargeable period



Based on this, submitting a Form 11 is a valid claim.  There is no requirement that I can see for the taxpayer to submit any further claims.  

The Revenue may make enquiries into the claim and request further information from the taxpayer to confirm the claim is accurate.


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## Graham_07 (28 Jul 2010)

mandelbrot said:


> In Graham's original example he says he received a 2004 Notice of  Assessment, which resulted in an overpayment that Revenue aren't going  to issue. I find it hard to sympathise with a taxpayer who is sending in  their return nearly 5 years after it's due date. To be fair you could  have sent it in, what, 3 years late and still validly claimed the  repayment! If someone is that remiss in keeping up their end of the deal  then I suppose that is a consequence they have to face.



Just to clarify, this was a one off return for 2004 for a person who, until he received a notice from Revenue to say he was due a refund for a later year but that it would not be repaid until the outstanding return was filed for 04, did not even know that a return was due for 04 ( or that he was deemed treated as a self-employed individual for that 04 period).  It was not a case of a continuing self-employed individual who certainly ought to have known their obligations in this regard. The tax on account was R.C.T. paid in by a principal contractor. Revenue now get to keep that money.


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## Carey (28 Jul 2010)

Surely this could be challenged in the courts?


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## mandelbrot (28 Jul 2010)

Obviously you'd have to sympathise with the taxpayer in your case Graham, but I still don't think the law is inherently unfair. Ultimately the obligation for submitting a return/making the claim for repayment has to rest with the taxpayer. There are probably any number of individuals who have RCT credited against their accounts but haven't submitted a form 11 for years, or in some cases may not even have registered their trade...

There has to be legislation to ensure that people are incentivised to deal with their tax affairs reasonably promptly; you can blame revenue or the government if you want, but personally I like to blame the people who spend their lives trying to avoid paying their fair share, and whose behaviour makes the legislation a necessity...

Slightly off to one side on this one Graham, but did the guy not have pink slips from the principal? If not then the principal is surely guilty of an offence...


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## Graham_07 (29 Jul 2010)

mandelbrot said:


> Ultimately the obligation for submitting a return/making the claim for repayment has to rest with the taxpayer.



This is the core of the matter. All taxpayers are expected to have a good knowledge of the Taxes Acts as applicable to them.  




mandelbrot said:


> Slightly off to one side on this one Graham, but did the guy not have pink slips from the principal? If not then the principal is surely guilty of an offence...



This lad was 18 then, came to me recently, 6 years later. Didn't even know there was money to his credit for 04 until I filed the outstanding return to enable the 09 refund be released. The principal must have filed the RCTDCs but the young fella had no recollection of them. At this point its irrelevant unfortunately.


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## Ants09 (29 Jul 2010)

Graham_07 said:


> A bit off thread but a colleague told me of a case recently. Taxpayer was owed a refund of tax for 2005 , they also owed Revenue a balance for 2004 and were further owed a refund of tax for 2009. The refund for 2005 was disallowed under the 4 year rule. The liability for 2004 ( also outside the 4 years but irrelevant ) was collected by reducing the 2009 refund and the taxpayer got the balance. Try explaining the logic of that to the taxpayer he said to me.


 
Section 865 TCA deals with repayments of taxes ! not offsetting taxes !

you should of asked for the 2005 refund to be offset against the 2004 liability first of all and then you would of getting the refund for 2009.

if you appeal this assessment and tell the revenue that you have studied section 865 and no were does it mention not allowing offsetting taxes ie the 2005 refund then the revenue would  have to do this as i have done it with a few clients and they have allowed it


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## Graham_07 (29 Jul 2010)

Ants09 said:


> Section 865 TCA deals with repayments of taxes ! not offsetting taxes !
> 
> you should of asked for the 2005 refund to be offset against the 2004 liability first of all and then you would of getting the refund for 2009.
> 
> if you appeal this assessment and tell the revenue that you have studied section 865 and no were does it mention not allowing offsetting taxes ie the 2005 refund then the revenue would  have to do this as i have done it with a few clients and they have allowed it



This was a case a colleague told me about. I'll pass that information on to him. Thanks v. much.


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## tallpaul (29 Jul 2010)

A query on this issue which I would be grateful for advice on:

In April 2010, myself and my wife received a series of balancing statements for the years 2006 through to 2009 whereby we were notified and reimbursed for overpayment of income tax in these years. Upon enquiry with our local tax office, we were advised that a tax allowance had erroneously never been credited to my wife when we got married which resulted in the overpayments of tax and subsequent reimbursement.

I know that Revenue normally does not examine matters more than four years previous to the current tax year. However, given that the tax allowance error was made in the first jointly assessed year, we could not have been aware of the mistake and as such assumed that our tax credits and allowances were correct. In effect we had no correct reference with which to compare the amount of tax paid. 

We got married in 2002 and as such think we overpaid tax for 2003 to 2005.

Sorry for being so longwinded but does anyone think that Revenue will entertain us by asking to go back so far in time?


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## Graham_07 (29 Jul 2010)

tallpaul said:


> A query on this issue which I would be grateful for advice on:
> 
> In April 2010, myself and my wife received a series of balancing statements for the years 2006 through to 2009 whereby we were notified and reimbursed for overpayment of income tax in these years. Upon enquiry with our local tax office, we were advised that a tax allowance had erroneously never been credited to my wife when we got married which resulted in the overpayments of tax and subsequent reimbursement.
> 
> ...



Unfortunately, the issue here is you are talking about a *repayment claim* for  allowances not previously claimed. Back to Section 865 Taxes Consolidation Act 1997. Sub-section (3) says " _Revenue must not make a repayment of tax overpaid unless the claimant has made a *valid claim*_ " Subsection (4) says "_A claim for repayment ... is not allowed unless it is made......within 4 years after the end of the chargeable period to which the claim relates..._"

You may indeed have overpaid in 2003-2005 if the refunds for 2006+ are anything to go by. Unfortunately you may be just another victim of S.865.


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## Homer (30 Jul 2010)

On reading the above, it seems to me that the prohibition relates solely to Revenue making a _repayment_.  If a taxpayer had overpaid more that 4 years ago, what's to stop them asking the Revenue to offset the overpayment against their future tax liability e.g. by increasing their tax credits for the current year if they are a PAYE taxpayer?


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## Graham_07 (30 Jul 2010)

Ants09 said:


> Section 865 TCA deals with repayments of taxes ! not offsetting taxes !
> 
> if you appeal this assessment and tell the revenue that you have studied section 865 and no were does it mention not allowing offsetting taxes ie the 2005 refund then the revenue would  have to do this as i have done it with a few clients and they have allowed it





Homer said:


> On reading the above, it seems to me that the prohibition relates solely to Revenue making a _repayment_.  If a taxpayer had overpaid more that 4 years ago, what's to stop them asking the Revenue to offset the overpayment against their future tax liability e.g. by increasing their tax credits for the current year if they are a PAYE taxpayer?



Yes, Ants mentioned this above. In the case I was referring to I have mentioned this to my colleague who is following it up. If he succeeds in getting an offset I'll report back. (This was a self-assessment case though, not PAYE )


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## mandelbrot (30 Jul 2010)

Sorry lads I don't think that assertion about repayment v offset holds any water.
The Acts don't seem to mention offsets anywhere, so I would say that strictly speaking an offset IS a repayment, which for mutual convenience of both revenue and the customer is transferred into a different taxhead or period... 
I'm totally open to correction on this if anyone has a different take on things. S.459 in particular sets out the mechanism, and mentions repayment but not set off...


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## mandelbrot (30 Jul 2010)

Homer said:


> On reading the above, it seems to me that the prohibition relates solely to Revenue making a _repayment_.  If a taxpayer had overpaid more that 4 years ago, what's to stop them asking the Revenue to offset the overpayment against their future tax liability e.g. by increasing their tax credits for the current year if they are a PAYE taxpayer?



As far as I know there is no mechanism by which a persons tax credits can just be adjusted upwards. 
We're talking about a computer system with controls in place, for example to ensure that staff can't just give their favourite uncle an unspecified €10k tax credit!
If you look at your cert of tax credits each credit is specified, and make up a total.
So there is no override to just manually increase a customer's tax credit next year.
Of course, the credits can be manually reduced, but that's for the taxpayers benefit, where it facilitates collection of an earlier underpayment...


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## Homer (31 Jul 2010)

My suggestion that you might be able to offset was based more on hope than expectation.  I imagine that if there a loophole that big in the legislation, people would have figured out how to exploit it by now.

However, I think a strong case can be made for offsetting overpayments against prior year underpayments and I would be interested to see how that pans out.


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## mandelbrot (31 Jul 2010)

Homer said:


> My suggestion that you might be able to offset was based more on hope than expectation.  I imagine that if there a loophole that big in the legislation, people would have figured out how to exploit it by now.
> 
> However, I think a strong case can be made for offsetting overpayments against prior year underpayments and I would be interested to see how that pans out.




I don't mean to be smart Homer, but those two paragraphs totally contradict each other - yes, surely if there was a loophole it would by now be widely exploited, and would have been closed off. This would suggest there is no case for offsetting overpayments, full stop. Revenue do offsets as a matter of mutual convenience, but they are in fact repayments and subject to S.865 (just my understanding, totally open to correction!)


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## Graham_07 (31 Jul 2010)

Ants09 said:


> Section 865 TCA deals with repayments of taxes ! not offsetting taxes !
> 
> if you appeal this assessment and tell the revenue that you have studied section 865 and no were does it mention not allowing offsetting taxes ie the 2005 refund then the revenue would  have to do this as i have done it with a few clients and they have allowed it





mandelbrot said:


> I don't mean to be smart Homer, but those two paragraphs totally contradict each other - yes, surely if there was a loophole it would by now be widely exploited, and would have been closed off. This would suggest there is no case for offsetting overpayments, full stop. Revenue do offsets as a matter of mutual convenience, but they are in fact repayments and subject to S.865 (just my understanding, totally open to correction!)



Going from Ants post above there would appear to be some wriggle room on this with at least some tax districts.


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## mandelbrot (31 Jul 2010)

Graham_07 said:


> Going from Ants post above there would appear to be some wriggle room on this with at least some tax districts.



Well definitely in any dealings with the tax office the interpretation / judgement of the individual inspector comes into play; but just because one (or several) inspector makes a mistake, this doesn't mean that it'll be repeated across the board, or even within a district.

So it definitely might be worth a try arguing for offset instead of repayment, and if the amount is relatively small or the inspector is feeling lazy then you might get lucky, but if they go and pull that big red book off it's shelf then I think you'll probably get a different answer...!


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## Mrs Vimes (3 Aug 2010)

mandelbrot said:


> As far as I know there is no mechanism by which a persons tax credits can just be adjusted upwards.
> We're talking about a computer system with controls in place, for example to ensure that staff can't just give their favourite uncle an unspecified €10k tax credit!
> If you look at your cert of tax credits each credit is specified, and make up a total.
> So there is no override to just manually increase a customer's tax credit next year.
> Of course, the credits can be manually reduced, but that's for the taxpayers benefit, where it facilitates collection of an earlier underpayment...



Credits can actually be increased by putting on "EXPENSES".  Any figure can be input, normally  expenses would be quite small (eg nurses about eur700) but are allowed at top rate of tax so putting on expenses of 10,000 would reduce the tax bill by 4,200.  That would be a seriously favorite uncle.  Obviously the Revenuer who did this would be in serious trouble.
Sybil


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## Towger (3 Aug 2010)

Mrs Vimes said:


> Credits can actually be increased by putting on "EXPENSES". Any figure can be input, normally expenses would be quite small (eg nurses about eur700) but are allowed at top rate of tax so putting on expenses of 10,000 would reduce the tax bill by 4,200. That would be a seriously favorite uncle. Obviously the Revenuer who did this would be in serious trouble.
> Sybil


 
Exactly. I have had my TFA increased by over £40K, in the days you could buy a house for 40K. I rang then up, the person I got talking to admitted it was actual her who made the mistake and thought it was hilarious. I asked it would have ever been spotted and was told probably not.


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## mandelbrot (3 Aug 2010)

Mrs Vimes said:


> Credits can actually be increased by putting on "EXPENSES".  Any figure can be input, normally  expenses would be quite small (eg nurses about eur700) but are allowed at top rate of tax so putting on expenses of 10,000 would reduce the tax bill by 4,200.  That would be a seriously favorite uncle.  *Obviously the Revenuer who did this would be in serious trouble.*
> Sybil



D'Oh, I forgot about good old expenses! I remember hearing that something along those lines did actually happen, and down in your neck of the woods Mrs Vimes...

And needless to say the person(s) involved are no longer in the employ of the state.

You can be pretty sure the controls on the system have been tightened since then though!


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## Homer (3 Aug 2010)

mandelbrot said:


> I don't mean to be smart Homer, but those two paragraphs totally contradict each other - yes, surely if there was a loophole it would by now be widely exploited, and would have been closed off. This would suggest there is no case for offsetting overpayments, full stop. Revenue do offsets as a matter of mutual convenience, but they are in fact repayments and subject to S.865 (just my understanding, totally open to correction!)



I don't see how the two paragraphs contradict each other.  In the first paragraph, I was talking about offsetting overpayments against *subsequent* underpayments.  In the second paragraph, it was against *prior* underpayments.

I think that a legitimate argument could be made for someone who owes money to Revenue being allowed to regard payments subsequently made to Revenue as being made towards the arrears that they owe.  It's a fairly limited case and does not necessarily open the floodgates for taxpayers to backdate indefinitely.


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## mandelbrot (4 Aug 2010)

Homer said:


> I don't see how the two paragraphs contradict each other.  In the first paragraph, I was talking about offsetting overpayments against *subsequent* underpayments.  In the second paragraph, it was against *prior* underpayments.
> 
> I think that a legitimate argument could be made for someone who owes money to Revenue being allowed to regard payments subsequently made to Revenue as being made towards the arrears that they owe.  It's a fairly limited case and does not necessarily open the floodgates for taxpayers to backdate indefinitely.



I believe the two paragraphs contradict each other because there is no mention anywhere in the legislation of setting off overpayments, only repayments. (Setting off is only a convenient mechanism to cut down on administrative work for both Revenue and the Taxpayer). So it is irrelevant whether the taxpayer wants to have an overpayment set forward, set back or set sideways (against a different tax head); it is  in fact a request for repayment, and therefore subject to S.865.

Now I know you are strictly talking about Overpayments, but I think you are making a distinction that doesn't exist in the legislation. A payment is a payment is a payment, regardless of whether upon the subsequent raising of an assessment it turns out that the amount paid actually exceeded the ultimate liability. You can't distinguish between a payment that gave rise to an overpayment, and one that didn't. And in the event that an overpayment does arise, then S.865 and the 4 year rule applies.

Maybe I'm missing something here - Can you explain how from a  legislative point of view you could see it working? Taken to its logical  conclusion your line of thought would suggest that if you got a Revenue  audit tomorrow, and were found to have a substantial liability, you  could turn around and argue that the payments you made against  subsequent periods should be set in priority against the earlier period  where the liability has been found to arise, thereby reducing the amount  of interest owed. (However, when you make a payment to Revenue, for  example preliminary tax,  you specify to Revenue what period the payment  relates to. The legal  concept of estoppel precludes you from then  subsequently arguing  that the payment in fact related to an earlier  period.)


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