Income Tax Act 2007 section 955

Proceedings begun before a set-off claim is made

Section 955 deals with the situation where HMRC has already begun proceedings to collect income tax (or interest on that tax) before the taxpayer makes a claim to set off amounts against that liability.

• A set-off claim made after collection proceedings have already started does not halt or delay HMRC's collection or recovery of the tax or interest.
• The set-off claim is effectively put on hold — it has no practical effect on the ongoing collection process until the claim has been finally determined.
• If, once the set-off claim is finally resolved, it turns out that the taxpayer has overpaid income tax as a result of the collection continuing, the overpaid amount must be repaid to them.
• "Proceedings" is broadly defined and includes enforcement actions such as distraint, attachment, and taking control of goods under Schedule 12 to the Tribunals, Courts and Enforcement Act 2007.