What does section 55 of the Tax Collection and Management (Wales) Act 2016 do?

Section 55 empowers the Welsh Revenue Authority (WRA) to recover devolved tax repayments made to a taxpayer that should not have been made. WRA can raise an assessment against the taxpayer, and the incorrectly repaid amount is treated as unpaid devolved tax, enabling WRA to use standard collection and enforcement mechanisms to recover it.

Can WRA recover repayment interest paid alongside an incorrect tax repayment under section 55?

Yes. Under section 55, WRA is not limited to recovering only the tax element. Where interest was paid as part of an incorrect repayment of devolved tax, the assessment can also include that interest. The full amount received in error by the taxpayer — both the tax and the interest — can be recovered.

How is an incorrectly repaid amount of devolved tax treated under section 55?

The incorrectly repaid sum is treated as if it were unpaid devolved tax. This legal treatment means that all the usual collection and enforcement mechanisms available to WRA for recovering unpaid devolved tax can be applied to recover the overpayment, giving WRA the same broad recovery powers.

Can you give an example of how section 55 applies in practice?

A taxpayer claims a land transaction tax relief and receives a repayment of £5,000 plus £200 in repayment interest from WRA. If it later emerges the taxpayer was not entitled to the relief, WRA can assess the taxpayer for the full £5,200 and recover it using standard unpaid devolved tax collection powers.

Tax Collection and Management (Wales) Act 2016 section 55

Assessment to recover excessive repayment of tax

Section 55 deals with how the Welsh Revenue Authority (WRA) can recover overpayments of devolved tax that were incorrectly repaid to a taxpayer.

If a devolved tax repayment has been made to a person that should not have been made, WRA can assess and recover that amount.
The incorrectly repaid amount is treated as though it were unpaid devolved tax, giving WRA the same recovery powers.
Where interest was paid alongside the incorrect repayment, WRA can also recover that interest.
The total amount assessed can therefore include both the overpaid tax and any interest that should not have been paid.

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