| 单词 | error or mistake |
| 释义 | error or mistake When the taxpayer has made a mistake on the tax return and this has led to over-payment of tax, an “error or mistake” claim can be made under the Taxes Management Act 1970 sch 1AB for repayment of the tax overpaid. This claim must be made within four years of the end of the tax year to which it relates. The time limits in these two provisions can be extended at the discretion of the First-tier Tax Tribunal. The approach to be taken by the Tribunal in considering such an extension is specified in William Martland v HMRC [2018] UKUT 178 (TCC). An entry in a return that subsequently proves to be incorrect is not a “mistake” under the terms of this provision. In British Mexican Petroleum Co Ltd v Jackson [1932] UKHL TC 16, the taxpayer company had incurred a large liability in year 1; in year 3 the creditor released a part of it. The House of Lords held that the release could not alter the amount of the liability entered for year 1. In Symons v Weeks [1983] STC 195 staged payments to architects involved a substantial element of payment in advance, but the exact whole fee could not be known until the work was completed. No change was permitted. Similarly, it is not a mistake where the return was made in accordance with “prevailing practice” (TMA 1970 sch 1AB para 2(8)), even if the practice is later considered wrong. In Carrimore Six Wheelers Ltd v IRC [1944] 2 All ER 503, rents had been included in trading income, contrary to statute. This could not be corrected. In Arranmore Investment Co Ltd v IRC [1973] TR 151, NI CA, the Revenue changed its interpretation on a point of law. The Court of Appeal rejected the company’s error or mistake claim, saying that the previous view of the law constituted the “prevailing practice” under which the profits were originally returned. In Monro v R & C Comrs [2008] EWCA Civ 306, Mr Monro completed his 1999/2000 tax return incorporating the gain he made on the exercise of an employee share option. He computed the gain as proceeds of sale £7,386,955, less the price he paid. After he submitted his tax return, the Court of Appeal ruled in Mansworth v Jelley [2002] EWCA Civ 1829 that such a computation is wrong in law. The cost to be deducted should be the market value, not the price paid. This judgment meant that Mr Munro had paid £846,000 more in tax than was properly due from him. HMRC refused to repay the tax overpaid. He appealed. The court rejected the claim for repayment of tax as, in 1999/2000, the practice prevailing was to deduct the base cost, and not the market value as was subsequently decided to be the correct approach. An alternative to the statutory claim can be the application of the common law remedy of restitution, the principle of which is neatly stated by Lord Gough in Lipman Gorman v Karpnalel Ltd [1991] 2 AC 548. A claim for repayment of tax under the law of restitution was made in Campbell v Hall (1774) 1 Cowp 204 and in Deutsche Morgan v IRC [2007] STC 1 (HL). Rectification by the Court can, sometimes, correct a taxpayer’s mistake. In Toronto-Dominion Bank v Oberoi & Others [2004] STC 1197 a foreign bank signed a lease for a house for one of its senior employees with a rent of £345,000 for a 22-month period. The Court relabelled the £345,000 as “premium”, rather than “rent”, dramatically reducing the benefit in kind charged on the employee. |
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