HMRC has issued a warning over a four-year limit to claim back overpaid tax. The issue came to light after a customer contacted the authority over social media with a question about how to claim back some tax.
They asked: “I understand that if you believe HMRC made a mistake in your tax calculation for a specific year you have 20 years to request the correction?
“What happens in a scenario where, for example, for tax year 2000/01, HMRC posted some adjustments during 2006. Does the fact that the adjustments (which I believe may be incorrect) are within the 20 year window override the fact that the year they relate to isn’t?”
HMRC replied to first ask if the person was referring to a PAYE tax calculation or a self-assessment calculation, with the person saying this was to do with self-assessment.
HMRC then clarified the rules: “The 20 year window relates to how far back HMRC can go back to review a self assessment calculation and this is if we suspect deliberate tax evasion.”
The individual then asked if this meant there would no time limit in their case and so they could ask for their tax back.
But the tax authority unfortunately had to dash their hopes, saying: “no, as per the guidance the person must make the overpayment relief claim within four years of the end of the relevant tax year or accounting period.”
They also sent them a link to a webpage with more information about the rules for claiming overpayment relief.
You can claim this relief to be repaid income tax, capital gains tax, Class 4 National Insurance contributions or corporation tax, or to reduce an excessive assessment.
The advice states: “The person must make the overpayment relief claim within four years of the end of the relevant tax year or accounting period.”
If you believe you have paid too much tax, the Government website has a tool you can use to check if you can claim back an amount.
There are various reasons you could pay too much tax, such as if your tax code changes when taking up a new job.
You may also get a letter from HMRC if you have paid too much tax for the previous tax year, either a P800 or a Simple Assessment letter, which will tell you how to claim back the amount.
These are usually sent out between June and March of the following year.
