A protective claim is an ordinary claim for repayment or relief made before the time limit expires, on grounds that depend on a legal point still being argued in another case, so that the right to repayment is not lost while the litigation runs. For income tax, capital gains tax and corporation tax there is no special procedure: the claim must meet the normal statutory requirements and HMRC either enquires into it or gives effect to it. For VAT, HMRC says it does not accept protective claims; it rejects the claim and the claimant appeals and asks for the appeal to be stayed behind a lead case.

What problem does a protective claim solve?

Tax disputes on a point of law can take years to reach a final decision. Meanwhile, the time limits for claiming keep running. The general limit for an income tax or capital gains tax claim is 4 years after the end of the tax year (section 43 TMA 1970), and the same 4 year limit applies to overpayment relief under Schedule 1AB TMA 1970. For companies, overpayment relief must be claimed within 4 years after the end of the accounting period (SACM12155). A return can be amended by the taxpayer only within 12 months after the filing date (section 9ZA TMA 1970). Someone who waits for the final judgment before claiming may find the earlier years already closed.

A protective claim keeps those years open. It is called protective because the claimant’s real position is that the claim succeeds only if the litigation goes the right way. Our page on time limits for tax claims lists the deadlines that most often need protecting.

How do you make one for income tax or capital gains tax?

Where the return can still be amended, amending it is usually simpler. Where it cannot, the route is normally a claim for overpayment relief. SACM12150 sets out what a valid claim must contain:

  • it must be in writing and say clearly that it is a claim for overpayment relief;
  • it must identify the tax year or accounting period;
  • it must give the grounds, which for a protective claim means explaining the legal point and naming the litigation relied on;
  • it must say whether the person has previously appealed in connection with the payment or assessment;
  • it must state the amount believed to be overpaid; and
  • it must include a declaration signed by the taxpayer, not the agent (or by an officer of a company).

The claim cannot be included in a tax return, including the SA900 for trusts. A claim returned as invalid is not a claim, so check the form before the deadline rather than after.

What does HMRC do with it?

HMRC handles overpayment relief claims on a process now, check later basis (SACM12160). If it has concerns it must open an enquiry by written notice; unless it is enquiring, it must give effect to the claim. Under paragraph 5 of Schedule 1A TMA 1970, the enquiry notice must be given by the later of the quarter day after the first anniversary of the claim and, for a claim relating to a tax year, the first anniversary of the following 31 January (SALF609). A claim based on a disputed legal point will usually be enquired into. When the enquiry ends, the closure notice may amend the claim, even to nil, and that decision can be appealed.

Once there is an appeal, the tribunal rules allow either party to apply for it to be stayed behind a lead case under Rule 5 (ARTG8553). A decision in the lead case is not binding on stayed appeals, but it is often persuasive and the parties may settle on the same basis. See statutory review and the tax tribunal for the appeal route.

Which exclusions can defeat a protective claim?

Schedule 1AB lists cases in which HMRC need not give effect to an overpayment relief claim. Several affect claims that wait on litigation:

  • Case D. The grounds have already been put to a court or tribunal in the claimant’s own appeal about the same amount.
  • Case E. The claimant knew, or ought to have known, the grounds while they could have raised them in their own appeal. If you already have an appeal open on the same tax, put the point into that appeal rather than relying on a later claim.
  • Case G. The liability was calculated in line with the practice generally prevailing at the time. This is the biggest risk. A return that followed the accepted practice cannot later be reopened through overpayment relief just because a court decides the practice was wrong, unless the tax was charged contrary to EU law. HMRC’s guidance at SACM12105 says that once a tribunal or court decides a practice is wrong, it ceases to be generally prevailing from that point, even if the decision is appealed.
  • Case A. Mistakes in making, or failing to make, a claim, election or notice are excluded altogether.

Case G is the reason a protective amendment, made while the return is still within the 12 month amendment window, can be more valuable than a later overpayment relief claim: the amendment is not subject to the Schedule 1AB exclusions, although HMRC can still enquire into it.

What about protective elections?

Because Case A shuts out overpayment relief for a missed claim or election, there is no fallback if an election is not made in time. Where it is uncertain whether an election will be needed, the safer course is usually to make it within its time limit and explain the basis. Whether an election can be made on a conditional basis, and whether it can later be withdrawn, depends on the statute that creates it, so check the wording before relying on it. Some reliefs build in their own provisional mechanism; see provisional rollover relief claims for one example.

How is VAT different?

HMRC’s VAT Refunds Manual at VRM15000 is direct: it does not accept protective claims and does not hold claims on file pending litigation. A claim made where HMRC does not accept that anything is due is rejected and the claimant is invited to appeal; where the point is being litigated, HMRC aims to have the appeal stayed behind the lead case (VRM10000). If an Upper Tribunal or higher court has ruled against HMRC, it pays the claim even while appealing, but raises a protective recovery assessment so it can take the money back if it later wins. A First tier Tribunal decision alone does not trigger payment. The VAT time limit is covered in the VAT four year cap on claims.

How might it work in practice?

Illustration only. In December 2026 an adviser notices that a tribunal has decided, in another taxpayer’s case, that a type of payment her client received in 2022 to 2023 was not taxable. HMRC is appealing. The client’s 2022 to 2023 return can no longer be amended, and the 4 year limit for that year ends on 5 April 2027. The adviser files a written overpayment relief claim before then, signed by the client, naming the case and setting out the amount. HMRC opens an enquiry and later refuses the claim; the client appeals and asks for the appeal to be stayed behind the lead case. If the client’s return had followed a generally prevailing practice when it was filed, Case G could still defeat the claim, so the adviser records why no such practice applied.

What mistakes lose the right to repayment?

  • Waiting for the final appeal decision before claiming.
  • Putting the claim in a tax return, or having the agent sign the declaration.
  • Failing to state the grounds and amount, so the claim is invalid.
  • Ignoring Case G when the original figures followed accepted practice.
  • Sending a VAT claim and treating HMRC’s rejection as the end, rather than appealing.

Where the return is still open, see amending a tax return.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.