What does Schedule 1AB paragraph 1 of the Taxes Management Act 1970 allow a taxpayer to do?

Schedule 1AB paragraph 1 allows a person who has paid income tax or capital gains tax they believe was not due, or who has been assessed as liable for such tax, to make a formal claim to HMRC for repayment of the amount paid or discharge of the liability. The statutory claim process must be followed.

Is HMRC obliged to give relief for every overpaid tax claim under Schedule 1AB?

No, HMRC is not required to give relief in every case. Specific exceptions apply under other paragraphs of the Schedule. Relief for overpaid tax is only available through Schedule 1AB, Schedule 1A, or under another provision of the Income Tax Acts or capital gains tax legislation. Informal routes are not permitted.

What happens if someone else pays tax on behalf of another person under this Schedule?

Where one person pays income tax or capital gains tax on behalf of another, the payment is treated under this Schedule as having been made by the person on whose behalf it was paid. This ensures the right to claim repayment or discharge rests with the person who bore the economic burden of the tax.

Does Schedule 1AB paragraph 1 apply to contract settlements with HMRC?

Yes, the Schedule also applies to amounts paid under contract settlements, which are informal agreements reached with HMRC to settle a tax dispute without formal proceedings. The same claim rules and procedural requirements governing overpaid tax apply to these settlement payments under the statutory framework.

Taxes Management Act 1970 Schedule 1AB paragraph 1

Claim for relief for overpaid tax etc

Schedule 1AB paragraph 1 establishes the right to claim a repayment or discharge of income tax or capital gains tax that a person believes was not due, and sets out the framework governing such claims.

A person who has paid income tax or capital gains tax they believe was not due, or who has been assessed or determined as liable for such tax, may claim repayment or discharge from HMRC
HMRC is not obliged to give effect to every claim — specific exceptions apply, and relief is only available through this Schedule and Schedule 1A, or under other provisions of the Income Tax Acts or capital gains tax legislation
Detailed rules on how to make and process claims are contained in further paragraphs of the Schedule and in related statutory provisions, including rules covering contract settlements
Where tax is paid by one person on behalf of another, it is treated for the purposes of this Schedule as having been paid by the person on whose behalf the payment was made

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