In a landmark ruling for Stamp Duty Land Tax (“SDLT”) overpayment claims, BTR Core Fund JPUT (“BTR”) secured the return of £3,064,633 in overpaid Stamp Duty Land Tax, a sum HMRC had sought to retain by invoking Case A of Schedule 10, paragraph 34A, Finance Act 2003(“FA2003”). The Upper Tribunal (“UT”) rejected HMRC's position, holding that an error in calculating SDLT liability does not constitute a "mistake in a claim," even where the taxpayer had claimed Multiple Dwellings Relief(“MDR”).
BTR had followed HMRC's own published guidance when completing its return for a £98,172,807 plus an overage of £4,600,000 for the leasehold estate Manchester property known as West Tower (“Property”) acquisition, only for that guidance to be corrected after the amendment window had closed. HMRC's attempt to deny relief on the basis that BTR was the author of its own misfortune was roundly dismissed by the UT. The mistake, the Tribunal found, lay in the self-assessment computation, not in the claim itself, and HMRC were accordingly liable to refund the overpayment in full, the excess having arisen from the erroneous application of the higher rates.
Rule
The legal framework governing this dispute centres on the interaction between two distinct statutory regimes within the Finance Act 2003: the overpayment relief provisions and the Multiple Dwellings Relief provisions.
Overpayment Relief Framework
Paragraph 34 of Schedule 10 to FA 2003 provides the statutory basis for recovering SDLT that should not have been paid. It entitles a person who has paid excessive SDLT to claim repayment from HMRC. However, this right is not absolute. Paragraph 34A carves out specific circumstances in which HMRC are not liable to give effect to such a claim. Case A, at paragraph 34A(2)(a), applies where the amount paid was excessive "by reason of a mistake in a claim or election." This exclusion lies at the heart of the present dispute: HMRC contended that BTR's overpayment fell within Case A; BTR argued it did not.
Multiple Dwellings Relief Framework
The MDR provisions in section 58D and Schedule 6B of FA 2003 establish a two-stage framework. Section 58D (2) governs the procedural act of claiming: MDR must be made in a land transaction return or amendment. Schedule 6B paragraphs 4 and 5 then prescribe the substantive calculation of relief once a valid claim exists. Importantly, Section 76(3) imposes a separate obligation every return must include a self-assessment of tax chargeable, regardless of whether any relief is claimed. BTR's error fell squarely within this self-assessment obligation, not the MDR claim itself. This distinction proved decisive.
The Tribunal adopted a purposive approach to construction, following the Supreme Court's guidance in Rossendale as applied by the Court of Appeal in Timothy Watts v HMRC [2025] EWCA Civ 1615. The phrase "by reason of" imports a causal test: the mistake must be the reason for the overpayment, and that mistake must be located within the claim itself, not merely connected to it. The purpose of Case A, the Tribunal determined, is to prevent taxpayers from circumventing time limits for making or amending claims by using overpayment relief as a backdoor mechanism. It is not intended to bar relief for computational errors in the self-assessment process, even where those errors arise in the context of a relief claim.
First-tier Tribunal Decision
The FTT dismissed BTR's appeal by the casting vote of the presiding judge. The majority held that the result of the MDR calculation, once entered in the SDLT return, became part of the claim. The FTT reasoned that Schedule 6B provided a self-contained code for MDR, and that a mistake anywhere in that process was necessarily a mistake in the claim. The FTT also considered that allowing overpayment relief would circumvent the statutory time limits for amending returns.
The dissenting member disagreed, finding that the statutory structure distinguished between the claim (the declaration in Question 9) and the calculation of liability (Question 14). He would have allowed BTR's appeal on the basis that the mistake was computational, not in the claim itself.
Application
BTR acquired the Property for approximately £98,172,807 plus overage. The Property comprised 350 build-to-rent dwellings and unlet commercial premises. BTR submitted an SDLT return claiming MDR, calculating SDLT liability by reference to the higher rates of SDLT in accordance with HMRC's published guidance at the time. It paid £4,702,886 in total. In November 2020, HMRC amended their guidance, accepting that transactions of this nature were not higher rates transactions. By then, BTR's window for amending its return had closed. BTR claimed overpayment relief instead, seeking repayment of £3,064,633.
HMRC initially paid, then issued a closure notice refusing relief on the basis that the overpayment arose "by reason of a mistake in a claim." The FTT, by casting vote, agreed with HMRC. BTR appealed. The Upper Tribunal allowed the appeal. The statutory structure draws a clear distinction between making a claim and calculating tax chargeable. BTR's MDR claim was validly made by completing Question 9—ticking "Yes" and entering Code 33. No quantification was required. The error arose at Question 14: BTR applied the higher rates when standard rates should have applied. That was a mistake in the self-assessment calculation under section 76(3), not a mistake in the claim under section 58D (2).
The Tribunal rejected HMRC's characterisation of Schedule 6B as a "self-contained code" where any error constitutes a claim error. Paragraph 1(c) explicitly provides that paragraphs 4 and 5 "describe the relief available if a claim is made", language distinguishing the claim from the consequent relief. HMRC's reliance on Prudential [2025] EWCA Civ 166 was misplaced: that case concerned failure to make a claim at all, not computational error where a valid claim existed.
The Tribunal also noted, without relying upon it, that HMRC confirmed they would not typically invoke Case A against a taxpayer who made the same rate error without claiming MDR. This concession was consistent with the Tribunal's construction: the error was in the rate applied to the self-assessment, not in the nature or content of any claim.
Practical Implications
This decision clarifies the boundary between a "mistake in a claim" and a mistake in calculating tax liability. The statutory structure separates the claim (section 58D (2), Question 9) from the calculation of tax chargeable (section 76(3), Question 14). Case A is engaged only where the mistake relates to the act of claiming or electing, not downstream computations.
Advisers should distinguish carefully: errors in making or framing a claim may trigger Case A; errors in computing tax chargeable do not. Where a relief requires only a declaration (as MDR does), an error in quantifying the resulting tax due is a self-assessment error, not a claim error.
Overpayment relief operates on a separate, longer time limit than return amendments, do not assume Case A precludes relief simply because the amendment window has closed.
Of note, BTR did not pursue a legitimate expectation argument despite having followed HMRC guidance that was later withdrawn. This remains a potential alternative ground in future similar cases.
