Income Tax (Earnings and Pensions) Act 2003 section 312

Recovery of tax

Section 312 deals with the recovery of tax where a retraining course exemption under section 311 was initially granted but the conditions for that exemption are subsequently found not to have been met.

• If a person's tax was calculated on the basis that the retraining course exemption applied, but they then fail to begin the course within one year of leaving employment, or they continue in or return to employment, HMRC can recover the tax that should have been paid.
• An assessment for the additional tax due can be raised under the discovery assessment provisions, but it must be made within 6 years of the end of the tax year in which the exemption was first applied.
• The employer or former employer must notify HMRC within 60 days of becoming aware that the individual failed to start the course, continued in employment, or was re-employed.
• If HMRC believe an employer has not given the required notification, they can formally require the employer to provide relevant information, allowing at least 60 days for a response.