In addition to restitution of ultra vires payments at common law, there are certain statutory provisions which provide for the recovery of overpaid taxes and duties.[1] Unfortunately, these provisions are not consistent as to when the claimant will be able to recover such overpayments. These differences involve such matters as the conditions which must be satisfied before the money can be recovered, whether there is a right to relief or whether it is subject to an administrative discretion, the types of defences which are available and whether or not interest should be awarded. The nature of these differences is illustrated by comparing two particular provisions.


Schedule 1AB of the Taxes Management Act 1970[2] provides for the recovery of overpaid income tax or capital gains tax which is not due, regardless of whether or not the money was paid by mistake. The Commissioners are not liable to give effect to a claim for restitution of such tax in various situations,[3] including where the tax liability was mistakenly assessed in accordance with a practice generally prevailing at the time, except where the tax was charged contrary to EU law. The limitation period for making a claim under this provision is usually four years,[4] save where it would be unconscionable for the Commissioners to retain the money. Where this provision is applicable it excludes the common law ground of restitution of overpaid tax contrary to domestic law,1 7 but not tax which has been overpaid contrary to EU law.128 Since, particularly after the 2009 reform of the provision, it is of very wide application in respect of recovery of income and capital gains tax, it follows that the common law claim grounded on Woolwich has been reduced significantly.

  • [1] 124 Substituted by Finance Act 2009, Sch 52(1). 8 Taxes Management Act 1970, Sch 1AB 2.
  • [2] 126 Ibid, Sch 1 AB 3(1). 10 Monro v HMRC [2008] EWCA Civ 306, [2009] Ch 69.
  • [3] 128 Test Claimants in theFII Group Litigation vHMRC [2012] UKSC 19, [2012] AC 337, [10] (Lord Hope),
  • [4] [117]—[119] (Lord Walker), [127] (Lord Clarke), and [204]-[205] (Lord Sumption).
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