HMRC has published draft legislation amending FA 2007 s 107. Under s 107, the time limit for an action in recovery of tax paid under a mistake of law is six years from the date of payment for all actions brought before 8 September 2003, which were not subject to a decision of the House of Lords before December 2006. In relation to those actions, s 107 effectively disapplies the time-limit extension contained in the Limitations Act 1980 s 32(1)(c) – which provides that the time-limit starts running from the time the mistake is discovered. In the Franked Investment Income decision ([2012] UKSC 19), the Supreme Court held that s 107 was incompatible with EU law and could therefore not apply to actions to recover tax paid contrary to EU law. The draft legislation therefore disapplies s 107 in relation to actions to recover tax paid under a mistake of EU law.
HMRC has published draft legislation amending FA 2007 s 107. Under s 107, the time limit for an action in recovery of tax paid under a mistake of law is six years from the date of payment for all actions brought before 8 September 2003, which were not subject to a decision of the House of Lords before December 2006. In relation to those actions, s 107 effectively disapplies the time-limit extension contained in the Limitations Act 1980 s 32(1)(c) – which provides that the time-limit starts running from the time the mistake is discovered. In the Franked Investment Income decision ([2012] UKSC 19), the Supreme Court held that s 107 was incompatible with EU law and could therefore not apply to actions to recover tax paid contrary to EU law. The draft legislation therefore disapplies s 107 in relation to actions to recover tax paid under a mistake of EU law.
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