The time limit for individuals to claim a repayment of tax they have overpaid has been changed from six to four years. This means that if you are entitled to claim a repayment of overpaid tax, you may have to make the claim earlier than anticipated.
Most self assessment taxpayers claim any repayment to which they are entitled in the year they make their tax return. However, if your circumstances change you may be entitled to claim back tax that you paid in earlier years. Circumstances which may give rise to an overpayment of tax in a prior year include where:
- you incur losses that can be claimed against income in an earlier tax year;
- pension contributions were paid late;
- your employer used the wrong tax code;
- your savings/investment income has reduced since you last told HM Revenue & Customs about it;
- you retired, changed from full-time to part time work, became self-employed, or stopped working altogether and did not receive any taxable earnings or benefits for the rest of the tax year.
The new deadlines are particularly pressing if you have a claim for the 2004-05 or 2005-06 tax years that you have not yet made. To meet the new deadline, you must submit your claim for the 2004-05 tax year by 31 March 2010 and for the 2005-06 tax year by 5 April 2010. HM Revenue & Customs have advised taxpayers to check their records carefully to ascertain if they are entitled to a repayment for these years.
If you are not a self assessment tax payer (i.e. you pay all your tax under PAYE and do not normally file a tax return) you can also claim back tax if you have overpaid due to a change in your circumstances.
MacRoberts provides a full range of tax compliance services and we would be happy to assess whether you have paid too much tax and to assist with the preparation and submission of any claim for repayment.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
