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HMRC Brief 15/09 provides clarification regarding ESC 3.5: Misdirection, which is effectively withdrawn from 1 April 2009.

Broadly, HMRC are required by law to collect all the taxes, duties and levies under their care, but they have a limited degree of discretion in specific circumstances. In recent years, there have been a number of cases before the courts which have defined the circumstances in which HMRC can regard themselves as bound by incorrect advice. The former Extra Statutory Concession 3.5: Misdirection gave HMRC's view of the circumstances in which they would regard themselves as bound by incorrect advice given to customers in respect of VAT and Insurance Premium Tax (IPT).

Since full and up-to-date information on this topic is now readily available on the HMRC website at http://www.hmrc.gov.uk/pdfs/info-hmrc.htm, HMRC have decided that ESC 3.5 is no longer necessary.

HMRC will not accept any further claims under the former concession from 1 April 2009. Customers who think they have received incorrect advice from HMRC in respect of VAT or IPT should see the guidance above for further help, or contact the National Advice Service on Tel 0845 010 9000. There will be no change in service to customers, as they will still be able to ask HMRC to consider their case if they feel they have been wrongly advised.

This does not affect customers who think they have over declared tax, as such cases will continue to be considered under the relevant sections of the Value Added Tax Act 1994, and Finance Acts 1994 and 1997.