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Chapter SACM12210

Document Cited in Related
Vincent
Published date10 April 2016
Record NumberSACM12210
CourtHM Revenue & Customs

Before 1 April 2011, where people had no statutory remedy to adjust an excessive assessment or displace a determination because the time limit for submitting a return had passed, HMRC would, in some cases, be prepared not to pursue their legal right to recover the full amount due. This practice was known as equitable liability and was explained in Tax Bulletin 18 (August 1995).

HMRC were only prepared to consider applying equitable liability where

  • it was clearly demonstrated that the liability assessed or determined was greater than the amount that would have been charged had the returns, and necessary supporting documentation, been submitted at the proper time, and
  • acceptable evidence was provided of what the correct liability should have been.

In such cases HMRC would accept a reduced sum based on the evidence provided if, in their view, it would be unconscionable to pursue recovery of the full amount.

This concessionary treatment depended on the circumstances of the particular case, and was conditional on the taxpayer’s affairs being brought fully up to date before the claim would be considered. The taxpayer was expected to pay the reduced sum in full. Cases were dealt with at HMRC’s Enforcement Offices in Worthing and...

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