Unjustified enrichment may occur where you (the taxpayer) have not ultimately borne the cost of the tax to be repaid and have already collected it from someone else. For example, if an amount of SLfT is repaid to a landfill site operator, the operator will already have collected the tax from customers paying to deposit waste at the landfill site.
Determining whether or to what extent unjustified enrichment applies
Where you make a claim for an amount to be repaid or discharged and someone else other than you has borne the cost of that amount, in determining whether or to what extent you would be unjustifiably enriched we must disregard any loss or damage (except to the extent of a ‘quantified amount’) that you have incurred, or might incur, as a result of mistaken assumptions made about the operation of any ‘tax-related provisions’.
A ‘quantified amount’ means the amount (if any) which you show to be appropriate compensation for the loss or damage resulting from the mistaken assumption.
‘Tax related provisions’ in this context include:
- the provisions of any enactment, subordinate legislation or EU legislation (whether or not still in force) which relates to the tax (or any other connected matter) that is contained in the claim; or
- any notice we have published under or for the purposes of any such enactment or subordinate legislation.
RSTPA 2014 sections 109-110
Furthermore, when determining whether or not a claim for repayment (and which falls within RSTP7003, but not RSTP7004) would unjustifiably enrich you, we will also take into account any reimbursement arrangements you plan to make to those who have ultimately borne the cost of paying the tax.
The reimbursement arrangements must include certain conditions and undertakings (see below) in order for us to take the arrangements into account.
Conditions and undertakings required for reimbursement arrangements to be accepted
In order for us to take any reimbursement arrangements into account in determining whether or not a claim would unjustifiably enrich you, certain conditions must be included and undertakings given.
The conditions which must be included are that:
- you must complete the reimbursement (including any interest we have paid to you in relation the amount being reimbursed) to the relevant person(s) within 90 days of us making a repayment to you;
- you cannot deduct any fee or charge (howsoever expressed or effected) from the amount being reimbursed, including any interest we have paid to you in relation to that amount;
- you can only provide reimbursement in cash or by cheque;
- if any part of the amount to be reimbursed (including any interest we have paid to you in relation to that amount) has not been reimbursed by the 90 day time limit, without prior demand you must pay this part of the amount to us within 30 days of the 90 day time limit expiring. If you fail to do this, you may be liable to a penalty – see RSTP3003 for further guidance; and
- you must keep specified records relating to the claim and produce them to us in accordance with any notice we give to you (see below).
The undertakings you must give are that:
- you have the names and addresses of the people who you have either already reimbursed or intend to reimburse;
- you will fully reimburse people (by cash or cheque), including any interest we have paid to you in relation the amount being reimbursed and without deducting any fee or charge (however expressed or effected), no later than 90 days after you received repayment from us;
- if any part of the amount being reimbursed (including any interest we have paid to you in relation to that amount) has not been reimbursed by the 90 day time limit, without prior demand you will pay this part of the amount to us; and
- you will keep the records as described further below, and will comply with any notice we give requiring you to provide those records.
These undertakings must:
- be given to us by you no later than the time you make the claim (for which the reimbursement arrangements have been made); and
- be signed and dated and in writing.
If either you or we later amend your claim, you must provide an amended undertaking (to reflect the amendment) within 14 days of either:
- you amending the claim under paragraph 10(1) of schedule 3 to the RSTPA 2014; or
- us amending the claim under paragraph 14(3)(b) of schedule 3 to the RSTPA 2014.
Keeping and producing records in relation to reimbursement arrangements
You must keep the following records for a period of three years from the date of reimbursement:
- the names and addresses of the people who you have reimbursed or intend to reimburse;
- the total amount reimbursed to each such person, including in all cases receipts from those reimbursed acknowledging how much has been reimbursed and which give the date of reimbursement;
- the amount of interest included in each total amount reimbursed to each consumer; and
- the date that each reimbursement is made.
If you fail to keep the above records as required, you may be liable to a penalty – see RSTP3002 for further guidance.
If we require to see these records we will notify you in writing, stating the place, time and date at or on which the records must be produced to us. We can notify you before or after (or both before and after) we have repaid you the amount in the claim. If you fail to comply with such a notice you may be liable to a penalty – see RSTP3003 for further guidance.