Claim for special relief

If you fail to submit a tax return HMRC may estimate the tax payable and notify you of this on determination notice. The tax determined cannot be appealed against and is legally enforceable. The only way to overturn the determination is to submit your self-assessment tax return for the year in question. This can only be done within four years of the end of the tax year in question. If the four years has elapsed, the only option is a claim to “special relief”.

When can you make a claim

The legislation regarding special relief is Schedule 1AB Para 3A Taxes Management Act 1970. In order to make a successful claim, three conditions must exist:

• it would be unconscionable for HMRC to collect (or not to repay) the sum in question
• your tax affairs are up to date or arrangements are in place to make them so; and

• you have not previously used special relief or its predecessor “equitable relief” (or there are exceptional circumstances why you should be allowed to use it again).

In practice, the first condition is the most difficult to meet. HMRC will resist most claims to relief on the basis that it is not acting “unconscionably”. It isn’t enough to prove that the determination is excessive (although a determination of £1 million when your average liability is a few hundred pounds might be dismissed as outrageous), or that you have changed addresses meaning you didn’t receive requests from HMRC to complete a tax return for the year in question.

Instead, you must demonstrate that there were genuine reasons beyond your control that prevented you submitting a tax return within the time allowed. For example, where you were suffering from a temporary or sporadic illness which makes tax compliance difficult, did not received HMRC notices, etc. for reasons outside your control, or were insolvent and overturning the determination would be detrimental to other creditors.

If you are claiming on the grounds of a health condition you will need to send documentary evidence, such as a letter from a GP.

Only the individual concerned can make a claim for special relief. If you are an advisor acting for the individual, you will need to get them to sign the claim, which you can with a covering letter to HMRC, i.e. you cannot sign the claim on the individual’s behalf.

How to make the claim

You must make the claim in writing, and it must include certain declarations, e.g. that you have never claimed the relief previously. Send the claim to the HMRC office that deals with your tax returns. There is no time limit for claiming the relief.