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RDG members may recall this case, which Tariq Baloch brought to our attention on 23 July. Park J. held that where a claim for overpaid tax can be framed as one for "mistake", as is very often the case, then the claimant can take advantage of Limitation Act 1980 s 32 to postpone the start of the 6-year limitation period.

The government have now announced that they will reverse this decision in the next budget - see Inland Revenue News Release of 8 September 2003, accessible from www.inlandrevenue.gov.uk. (They will also appeal the DMG case itself.) The draft clauses:-

(1) dis-apply s 32 from any "taxation matter under the care and management of the Commissioners of Inland Revenue";

(2) are retroactive, to the date of the press release itself;

(3) apply to "any action for relief from the consequences of a mistake of law, whether expressed to be brought on the ground of mistake or on some other ground (such as unlawful demand or ultra vires act)".

Cynics will remember that the broad interpretation of s 32, which is at the root of the Revenue's problem, was considered unsatisfactory even by the court which established it, both majority and minority judges in Kleinwort Benson calling for reforming legislation. Yet it seems that "caution, otherwise known as the Treasury" (© Lord Goff) has won the day again.

Steve Hedley
Faculty of Law, University College, Cork