HMRC offsetting current tax overpayment against historic open years

[brommers]

Having completed my SA for 20-21 and HMRC accepting that I'm due just over £1200 in overpaid tax, they've advised that they won't be paying it out due to there being open enquiries for pre-LC years (against which I've paid all the APNs) and 4 years covered by LC (nothing past 2015). This is despite the fact that the have acknowledged that my tax account shows a NIL due balance as they have marked all the open years as being under appeal and thus nothing due.

Besides me writing a polite letter to their complaints team and copying my very helpful MP (he sits on the LCAPPG committee), what other course of action do I have and, do my much more clued up friends here have any specific points of tax law etc. that I could reference to in my letter.

[regron]

Assuming it shows in your account as in credit, but just cannot get the refund. What I did was underpay tax that I owed on one of my SA's by the amount in credit and got it that way as it balanced the account to zero. Not ideal and frustrating to have to do it, but it worked. Would have to wait until next return though I guess and inform your accountant.

[dangerouswhensober]

I had this situation about three years ago - I was due a tax refund and HMRC initially refused to pony up as they said I had open years (Loan Charge) which might result in my owing them.

I made a formal complaint to HMRC - they have to independently investigate all complaints, and they have dedicated teams who do this - and I got my refund.

The truth is (or was) that tax credits due to you on an annual SA (at that time) could not be offset (by HMRC) against amounts owed to or claimed by HMRC for other years - each year HAD to be treated separately.

I'm writing that in the past tense as I don't know if this has changed in the last two or three years - suggest you ask your accountant.

Also, if you ever get the run-around from HMRC, don't be afraid to involve your MP - go and see him/her in person - a letter from an MP to HMRC on behalf of a constituent usually achieves remarkable results, I have found.

Good luck - let us know how you progress ...

[brommers]

Having followed advice from this forum, I made a complaint and wrote to my MP (who also sits on the LC APPG). HMRC acknowledged my complaint but didn't respond. They did however respond to my MP within 2 days and 5 days later the funds arrived. Their letter to my MP was the usual guff around LC and their successful challenges of various LC defences etc. and how they are willing to work with individuals etc. etc. and why they with-held the payment although they couldn't provide any link to tax law as asked by my MP.

[dangerouswhensober]

Well done 'brommers' - and it's great that the forum advice helped.

In my experience, the HMRC culture is mainly mired in inertia - the minions lower down the organisation will avoid making refund decisions unless and until they are absolutely forced to do so - by a letter from an MP, for example.

It's a pity that MPs time has to be taken up with 'poking' HMRC into the correct course of action ...