Extra statutory concessions

Q: Which concessions are still in use?

A selection that still comes up in practice: ESC A19: arrears caused by HMRC delay Income tax, capital gains tax and Class 4 National Insurance arrears can be written off where HMRC failed to make proper and timely use of information from you, your employer or the DWP, and told you about the arrears more than 12 months after the end of the tax year in which it received the information. You must reasonably have believed your affairs were in order. ESC B41: repayment claims out of time The normal time limit for a statutory claim is four years from the end of the tax year. B41 allows repayment outside the limit where the overpayment arose from an error by HMRC or another government department and there is no dispute or doubt about the facts. Compare statutory overpayment relief. Notice 48 paragraph 3.11: incorrect customer declarations Where a customer gives an incorrect eligibility declaration for zero rating or the reduced rate on fuel and power, and the supplier took all reasonable steps to check it and acted in good faith, HMRC will not seek the VAT from the supplier. Notice 48 paragraph 3.6: coin operated machines Operators may account for VAT when takings are removed rather than when the machine is used, although VAT is still due on stolen takings.

Q: What are the limits on relying on a concession?

It is not law. A concession operates only because HMRC chooses to apply it and can be withdrawn, as the 2017 programme and the 2026 linked goods change show. Every condition must be met. The booklet warns that special circumstances in a particular case may need to be taken into account. No avoidance. The booklet says a concession will not be given where an attempt is made to use it for avoidance, and Notice 48 says HMRC may withdraw or restrict a VAT concession in those circumstances. Check the current text. Always confirm the concession is still in force and has not been marked obsolete or replaced by a statutory rule with different conditions. Where HMRC has given you specific advice rather than a published concession, the question becomes one of legitimate expectation, covered in our guide to relying on HMRC advice.

An extra statutory concession is a published relaxation that lets taxpayers pay less than the strict letter of the law requires, usually to deal with minor anomalies or hardship. HMRC still operates a number of them, including ESC A19 on arrears caused by HMRC delays, but concessions are not law, can be withdrawn, must be met in full, and will not be given where someone tries to use one for avoidance.

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What is an extra statutory concession?

HMRC’s booklet of former Inland Revenue concessions defines one as a relaxation which gives taxpayers a reduction in tax liability to which they would not be entitled under the strict letter of the law. It explains that most concessions deal with minor or transitory anomalies, or with hardship at the margins of the tax code where a statutory remedy would be difficult to devise or out of proportion to the importance of the point.

VAT Notice 48 gives the indirect tax version: where remission or repayment is not provided for by law, HMRC may allow relief on an extra statutory basis when strict application of the law would create a disadvantage or have an effect that was not intended. Concessions are of general application, so anyone within the stated circumstances can use them, in VAT’s case without reference to HMRC.

A concession is different from HMRC guidance that simply explains the law, and different from a written view on a specific transaction such as a non statutory clearance. A concession openly departs from what the legislation says.

Where are concessions published?

There are two lists. Direct tax concessions are in “Extra Statutory Concessions: ex Inland Revenue”, a 57 page PDF most recently uploaded on 31 March 2026, which states the concessions as at 6 April 2018. They are lettered by area, with section A covering individuals. Obsolete concessions are kept by title only, with a note of what replaced them. The booklet treats a concession as obsolete if it has been superseded by legislation or a later concession, has a time limit that has expired, has been withdrawn, or relates to a tax that no longer applies.

VAT, excise and customs concessions are in VAT Notice 48, updated on 25 August 2026. It also marks obsolete entries and gives the withdrawal date. Notice 48 points out that special arrangements agreed with trade associations are not concessions; they are listed separately in Notice 700/57.

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Why have so many been withdrawn or turned into law?

The turning point was the House of Lords decision in R v Inland Revenue Commissioners ex p Wilkinson [2005] UKHL 30. HMRC’s 2017 technical note says the decision clarified the scope of its administrative discretion to depart from the strict statutory position. HMRC then reviewed all concessions: most could continue, but some went beyond its discretion and were either legislated, dropped as unnecessary or withdrawn.

To legislate them efficiently, section 160 of the Finance Act 2008 lets the Treasury give statutory effect by order to an existing HMRC concession, with or without modification. It covers any statement made before that Act was passed, whether called a concession, a statement of practice, an interpretation or a press release.

The booklet shows the results. ESC A1 on flat rate allowances for tools and special clothing is now in section 367 ITEPA 2003. ESC A22 on long service awards is now section 323 ITEPA 2003. ESC A11 on the year a person starts or stops being UK resident was replaced by Schedule 45 to the Finance Act 2013. On the VAT side, the concession for minor promotional items in linked supplies (paragraph 3.7 of Notice 48) was withdrawn from 8 January 2026; Revenue and Customs Brief 1 (2026) says such supplies should be treated as single supplies under the legislation and existing case law.

Which concessions are still in use?

A selection that still comes up in practice:

ESC A19: arrears caused by HMRC delay: Income tax, capital gains tax and Class 4 National Insurance arrears can be written off where HMRC failed to make proper and timely use of information from you, your employer or the DWP, and told you about the arrears more than 12 months after the end of the tax year in which it received the information. You must reasonably have believed your affairs were in order.
ESC B41: repayment claims out of time: The normal time limit for a statutory claim is four years from the end of the tax year. B41 allows repayment outside the limit where the overpayment arose from an error by HMRC or another government department and there is no dispute or doubt about the facts. Compare statutory overpayment relief.
Notice 48 paragraph 3.11: incorrect customer declarations: Where a customer gives an incorrect eligibility declaration for zero rating or the reduced rate on fuel and power, and the supplier took all reasonable steps to check it and acted in good faith, HMRC will not seek the VAT from the supplier.
Notice 48 paragraph 3.6: coin operated machines: Operators may account for VAT when takings are removed rather than when the machine is used, although VAT is still due on stolen takings.

How does ESC A19 work in a real case?

Illustration only. An employee starts a second job in July 2022 and the employer reports it to HMRC that month, during the 2022 to 2023 tax year. HMRC does not adjust the tax code. Twelve months after the end of that tax year is 5 April 2024.

If HMRC first tells the employee about the underpayment in October 2024, the arrears fall within A19 as long as the employee reasonably believed the tax was right.
If HMRC writes in February 2024, the 12 month test is not met. The arrears can be given up only in the exceptional case where HMRC failed more than once to use information about the same source and the arrears built up over two whole tax years in succession.

HMRC’s guidance says to apply by phone or letter before paying, stating which arrears you dispute, what information HMRC should have used and when it was given, and why you thought your tax was up to date. If HMRC refuses, you can ask it to review the decision.

What are the limits on relying on a concession?

It is not law. A concession operates only because HMRC chooses to apply it and can be withdrawn, as the 2017 programme and the 2026 linked goods change show.
Every condition must be met. The booklet warns that special circumstances in a particular case may need to be taken into account.
No avoidance. The booklet says a concession will not be given where an attempt is made to use it for avoidance, and Notice 48 says HMRC may withdraw or restrict a VAT concession in those circumstances.
Check the current text. Always confirm the concession is still in force and has not been marked obsolete or replaced by a statutory rule with different conditions.

Where HMRC has given you specific advice rather than a published concession, the question becomes one of legitimate expectation, covered in our guide to relying on HMRC advice.

What mistakes do people make?

Citing a concession that has been legislated and missing that the statutory version may have different conditions.
Paying disputed arrears before applying under A19, then having to ask for a refund.
Treating a trade body agreement under Notice 700/57 as a concession.
Assuming B41 allows any late claim; it needs an official error and undisputed facts.
Working from an old copy of the booklet or Notice 48 instead of the current GOV.UK version.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.