Overpayment relief claims: taxpayer win in the Upper Tribunal

The Upper Tribunal has upheld the taxpayer’s appeal against HMRC’s refusal to allow an overpayment relief claim for SDLT in excess of £3m.

Multiple Dwellings Relief was correctly claimed in the taxpayer’s original SDLT return but the amount of tax due was calculated incorrectly because the higher rates in FA 2003, Sch.4ZA were used.

The issue was whether tax was overpaid “by reason of… a mistake in a claim” per Case A of FA 2003, Sch.10, para.34A.  The FTT had held that it was. The Upper Tribunal (Judge Thomas Scott and Judge Nicholas Aleksander) overturned the FTT’s decision.

The Upper Tribunal agreed with Counsel for BTR in finding that the taxpayer had made a claim for MDR that complied with the legislative requirements, and that the mistake arose only by reason of the wrong choice of rate of SDLT which fed into the calculation of tax chargeable. Stating the amount of tax chargeable was not a requirement imposed on the making of the claim.

The Upper Tribunal concluded that there had not been a mistake in a claim, thereby preserving the important distinctions between the concepts of “claim”, “relief” and “tax chargeable”.

Hui Ling McCarthy KC and Susanna Mockford acted for BTR, instructed by Sean Randall Tax LLP. The decision can be viewed here.