Strike out application allowed in part only

A problem arose because the taxpayer made errors in its payroll software procedures. When setting up the wages for its drivers it did not correctly establish the overnight allowances under a tax free status. All the drivers received their correct pay in line with the net pay arrangements but the mistake resulted in the taxpayer overpaying PAYE tax and National Insurance by grossing up the salary of each driver.

The taxpayer claimed the overpaid tax and National Insurance for the years 2010-11 to 2016-17 by means of a letter dated 13 March 2019. HMRC refused and the taxpayer appealed to the First-tier Tribunal.

HMRC applied to the tribunal to have the appeal struck out on the ground there was no appealable decision and in any event there was no prospect of success. This was because the taxpayer had not sought a dispensation for the overnight tax-free...