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R (oao Rettig Heating Group UK Ltd (in liquidation)) v HMRC

This is the latest in the never-ending saga of the compatibility of the UK’s historic treatment of foreign dividends with EU law but it will be of wider interest as it revolves around HMRC’s published practice in relation to the extension of time limits for claims, in Statement of Practice SP 5/01.

In 2002 the company received dividends from an Irish subsidiary. It initially made its return on the basis that the dividends were taxable and it claimed to offset non-trading loan relationship deficits (NTLRD) against the income. It then amended its return, treating the dividends as not taxable, withdrawing the NTLRD claim and surrendering the NTLRD as group relief. The company later accepted that the dividends were in fact taxable, subject to a credit for foreign tax, which did not entirely cover the UK liability. In 2021 it therefore made a new claim to set part of the NTLRD off against the dividends (and reducing the group relief surrender accordingly).