Posted: 20/07/10 by Bank Brokers UK Ltd
Action should be taken now to avoid losing out on tax repayments after HMRC tightened up the rules regarding those who need to reclaim tax after earlier mistakes have been recognised, warns Chartered Accountants Moore Stephens.
For those with complex tax affairs, mistakes are often simply the result of an innocent misunderstanding of the rules but UK tax legislation can still be difficult to understand, despite the so-called tax simplification process that has been going on.
From 1 April 2010, however, HMRC have cut the time limit for claiming repayments of tax from earlier tax years where there was overpayment due to mistakes made in tax returns.
Peter Simons, of Moore Stephens in Northampton, said: "The previous time limit for making a claim was six years after the end of the tax year or accounting period - this has now been reduced to just four years."
The changes mean that the earliest tax year for which an Overpayment Claim can now be made is 2006/7 and a claim must be made by 5 April 2011 otherwise the taxpayer will miss out on any refund due.
For those who were not required to complete tax returns for 2004/5 and 2005/6 but who believe they have overpaid tax in these years, overpayments can still be claimed as long as claims are made by 31 January 2011 for the year 2004/5 and by 31 January 2012 for the tax year 2005/6.
For further information regarding the penalties and how to avoid them, contact Peter Simons on 01604 638361.