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Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

The report of key tax developments are displayed per year, per month, by Ireland, the UK or International and by report title

Set-off Across Taxes

New legislation in the Finance Bill 2008 now extends the principle of set-off of tax repayments against tax debts across a wider range of debts administered by HMRC.

The new proposals remove the need to seek authority from taxpayers before the set-off takes place. However, HMRC must still advise the taxpayer in writing what has been done.

From now on HMRC may make a set-off at any time where an amount is due from and payable to HMRC for the same legal person or entity at the same time. Where HMRC is obliged to set-off under specific legislation, these continue to take priority. Examples of such set-offs are for NICs, VAT, Landfill Tax, Aggregates Levy and Excise Drawback, and existing HMRC systems support these mandatory set-offs.

Going forward, set-off will be at HMRC's discretion or at the taxpayer's request. In particular, set off will mean that:

  1. Repayments are set only against established debts. ‘Established debt’ is a quantified debt that is correctly payable either based on a return from thetaxpayer or which has been assessed and either the appeal has been determined, or the period for appeal has passed.
  2. Payments are allocated using the framework of existing rules; where the aim is always to allocate to taxpayer's best advantage as outlined in DMBM240010. See http://www.hmrc.gov.uk/manuals/dmbmanual/DMBM240010.htm
  3. Self Assessment (SA) repayments will still be set automatically against SA Payments on Account within the same parameters as they are now.
  4. Repayments assigned to charity under the SA Donate Scheme will continue to be made to that charity. Other assignments will be secondary to set-off.

There will be no monetary limit to the amount set-off, but HMRC may choose not to exercise set-off for small amounts if it is clearly uneconomical or unproductive to do so.

HMRC will not use ongoing Tax Credit or Child Benefit awards to pay other tax debts and will only set other tax repayments against Tax Credit or Child Benefit overpayments when requested to do so by the customer.

Except in limited circumstances, HMRC will not hold up repayments where they are not already aware of a debt. When pursuing debts, HMRC will not in every case check for possible repayments unless they are aware that one is likely. However where staff discover that an overpayment and an outstanding debt exist, every effort will be made to set one against the other.

Full guidance is available at http://www.hmrc.gov.uk/finance-bill2008/set-off-taxes.htm