Historically HMRC has refused to process tax returns if they are submitted more than four years after the due date, even if this would give a taxpayer a substantial tax saving. However, a recent tax case led to a decision by the courts that HMRC has put too wide a construction on the legislation. The case involved a taxpayer who had made payments on account of a 2006/2007 liability amounting to more than £46,000 when, in fact, the actual liability for the year was considerably less. The taxpayer submitted his return after 5 April 2011 and reclaimed the tax overpaid. HMRC refused to process the return. However, the courts agreed with the taxpayer and HMRC has been advised to process the return and repay the tax.
If anyone has had a repayment rejected on the basis of the four-year time limit when no actual assessment is in point, it may well be worth going back and seeking a further repayment.
Date: 26th May, 2015
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