In Sarah Yaxley v HMRC [2025] TC09405, the First Tier Tribunal (FTT) found that a taxpayer could not appeal against HMRC’s calculation of Top Slicing Relief.

Bookkeeper

Ms Yaxley submitted a 2017-18 paper tax return in August 2018 including a claim for Top Slicing Relief. Top Slicing Relief (TSR) applies to withdrawals from certain types of investment bonds and is intended to adjust the tax liability to reflect the savings which would have been available if the withdrawals had been made over time instead of as a single lump sum. 

  • HMRC subsequently issued a tax liability calculation, including a Top Slicing Relief (TSR) breakdown.
  • Ms Yaxley queried HMRC’s TSR calculation in a letter described as an ‘appeal’ and supplied her own calculations.
  • In August 2021, following further correspondence with HMRC, Ms Yaxley confirmed that she had been “advised to put in a protective appeal/overpayment relief claim” regarding HMRC's 2017-18 TSR calculation.
  • HMRC wrote back the same month, noting that no correspondence relating to an Overpayment relief claim had been received.
    • Ms Yaxley and her husband stated they had missed this reply from HMRC due to Mr Laxley undergoing treatment for a serious medical condition.
    • They acknowledged it was likely that they had received HMRC’s letter.
  • Ms Yaxley Appealed to the First Tier Tribunal (FTT) in January 2024.
  • In March 2024, Ms Yaxley made an out-of-time overpayment relief claim, the deadline for 2017-18 being 5 April 2022.

The FTT found that:

  • The paper tax return submitted by Ms Yaxley was a self-assessment, even though the tax owed had been calculated by HMRC.
    • In such circumstances, HMRC’s calculation of tax due is made on behalf of the taxpayer and is treated as the taxpayer’s self-assessment. This point was established in Cotter v HMRC [2013] UKSC 69.
    • A taxpayer cannot appeal against their own self-assessment.
  • Given the language used by Ms Yaxley in her correspondence with HMRC, no amendment to her tax return was made by her during the period when an amendment could have been made.
  • Ms Yaxley's appeal to the FTT was submitted just under two months before the overpayment relief claim was submitted.
    • At the time of the appeal, there was no valid overpayment relief claim and no open enquiry.
    • There was no legal decision for which the appeal could have been raised.

The appeal was struck out, on the basis that the FTT had no jurisdiction.

Useful guides on this topic

Investment bonds & tax
How are investment bonds taxed? What is an investment bond? What is a chargeable event gain and how is it calculated? How do notional tax credits work? How is top-slicing relief calculated? What is deficiency relief?

Overpayment Relief
What is Overpayment Relief? When can you claim Overpayment Relief? What are the conditions for a claim for Overpayment Relief? What are the time limits for a claim for Overpayment Relief? 

How to appeal an HMRC decision
Disagree with an HMRC decision? How do you appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal? 

External link

Sarah Yaxley v HMRC [2025] TC09405

Squirrel advert

Loving our content? 😍
Sign up Now!
For free tax news, cases,
discounts & special tax briefings

We hope you are enjoying this amazing Practical Tax Database here at www.rossmartin.co.uk.

 

.