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Time Limits for Assessments/Claims
When HM Revenue & Customs (HMRC) was created in 2005, it inherited differing time limits for assessments and claims for direct and indirect taxes. HMRC sought to align these time limits with the aim of reducing compliance costs for taxpayers and to make HMRC Compliance Checks easier.
On this page:
When did the new time limits come into effect?
The new time limits came into effect on 1 April 2009 for VAT and on 1 April 2010 for Capital Gains Tax, Corporation Tax, Income Tax and Pay-As-You-Earn (PAYE). They apply to assessments and claims that are made after these dates regardless of the period the assessment or claim relates to.
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What are the changes to assessment time limits?
For Capital Gains Tax, Corporation Tax, Income Tax and PAYE the new time limits are:
- For normal time limits – four years from the end of the relevant tax period;
- For careless behaviour – six years from the end of the relevant tax period; and
- For deliberate behaviour – 20 years from the end of the relevant tax period.
HMRC no longer has 20 years to assess where tax is lost as a result of negligent conduct (which essentially equates to careless behaviour under the new penalty rules). However, the 20 year time limit still applies in respect of failure to notify cases with no reasonable excuse and certain failures in respect of tax avoidance schemes.
For VAT assessments and claims the new time limits are:
- For normal time limits – four years from the end of the relevant tax period (an increase from three years);
- For careless behaviour – four years from the end of the relevant tax period; and
- For deliberate behaviour – 20 years from the end of the relevant tax period.
Whilst the normal time limit for making most assessments and determinations is four years from the end of the relevant period there are some exceptions. If you do receive an assessment outside of the normal four year time limit, commonly referred to as a 'discovery' assessment, you should seek specialist advice.
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What are the changes to repayment claim time limits?
The time limits allowed for Self Assessment or PAYE taxpayers to make repayment claims has decreased from six to four years.
For Self Assessment taxpayers who delivered a tax return for 2004/05 and 2005/06 any claims had to be made by 31 March and 5 April 2010 respectively.
For people outside of Self Assessment, the new time limits for repayment claims do not take effect until 1 April 2012. Claims for 2005/06 years can still be made by 31 31 January 2012.
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What do the new time limits not affect?
The new time limits do not affect: -
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How can OneE TDI help?
At the core of OneE TDI is a highly experienced team specialising in all areas of tax disputes and investigations work. We offer confidential, non-judgemental advice to best defend our clients and have a proven track record in successfully managing all contentious tax matters. We provide an outstanding, cost-effective service, which results in tangible benefits and savings for our clients. We have up-to-date knowledge of all HMRC campaigns and disclosure facilities and are able to secure the best available terms for our clients.
Putting it simply, we take control and manage all issues relating to HMRC Compliance Checks so that our clients can get on with your life. What price peace of mind?
Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.
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How can I contact OneE TDI?
If you would like a free, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below:
Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.
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HMRC Compliance Checks