Time limits they are a changing

I’ve got some good news and some bad news.

First the good news: for VAT the time in which you can make a claim for underclaimed VAT has been increasing to four years since 1 April 2009. This means that until 1 April 2010 you can put in a claim for underclaimed for periods that ended after 31 March 2006. Up to 1 April 2009 the time limit was three years.

Now the bad news: this means that errors where you’ve underpaid VAT also have a four year window within which they have to be adjusted. This means that HMRC can also assess for errors made in the four year period too!

Now the even worse news: for direct tax, e.g. income tax, the time limit for claims is reduced to four years. If you want to make a claim for tax before 1 April 2006 you need to make it before 1 April 2010. The silver lining is, of course, that HMRC won’t be able to assess for back tax if they don’t do it before 1 April 2010!

Do seek help from a professional adviser if you need to make a claim and might be affected by these changes.

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