Making an overpayment relief claim
Making an overpayment relief claim with HMRC may be appropriate where you have made a mistake in your tax return. Equally importantly this mistake results in a greater tax liability than should be the case. Additionally a claim may be appropriate where HMRC makes a tax determination that you believe to be incorrect.
Making a claim
As a successful claim results in a reduced tax liability, typically HMRC are pedantic when reaching any agreement. Therefore when making an overpayment relief claim it is important to ensure the following details are submitted.
Furthermore if you are making a tax repayment claim, you must have documentary proof of the tax deducted or suffered. This is because HMRC may require this to be provided at a later date.
When a claim is not appropriate
There are a number of circumstances where HMRC consider that a claim for overpayment relief is not appropriate. Broadly speaking these cover scenarios, such as you failing to make an election in time, or where assessments have already been determined at a tax tribunal.
An overpayment relief claim is inapplicable where the tax was calculated in accordance with prevailing practice at the time. Whether there was a practice generally prevailing is a question of fact.
Time limits
If you are making a claim for overpayment relief it must be submitted within four years after the end of the relevant tax year, For example, a claim for the 2020/21 would need to be made by 5th April 2025
HMRC might accept a late claim on a discretionary basis depending on the facts of the claim.
Summary
Making an overpayment relief claim can be a valuable method of reducing an earlier year's tax liability due to a previous error. However it's important to ensure that it is submitted to HMRC in the correct format and within the time limit to ensure a successful outcome.
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