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HMRC loses challenge on late capital allowances claim

Updated: Jul 5, 2020

The Tax Rules Contain Important Time Limits for Claims

The recent case of HM Revenue & Customs (“HMRC”) v Dundas Heritable Ltd [2019] UKUT 0208 (TCC) reinforces the fact that a claim for capital allowances may be made, amended or withdrawn at any time up to whichever is the last of the following dates:

  1. the first anniversary of the filing date for the company tax return of the claimant company for the accounting period for which the claim is made;

  2. if notice of enquiry is given into that return, 30 days after the enquiry is completed;

  3. if after such an enquiry [an officer of Revenue and Customs] [amends] the return under paragraph 34(2), 30 days after notice of the amendment is issued;

  4. if an appeal is brought against such an amendment, 30 days after the date on which the appeal is finally determined.

HMRC argued that the claims were not made in time for the purposes of (1) above and were therefore invalid. They also argued that when the claims were finally made there was no open enquiry for the purposes of (3)-(4) above. The mere fact that an enquiry had to be opened to remove the late claims, in HMRC’s view, did not make the original claims valid.

FTT (and now the UT) found in favour of the taxpayer and further details on the original decision can be found here.

We would always advise filing tax returns on time but if you do find yourself unable to do so and/or the subject of an HMRC enquiry the above case could provide a useful reference to support an accompanying valid capital allowances claim.

If you would like more details, please do not hesitate to contact us.


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