Everybody makes mistakes — it’s what you do afterwards that counts.
So, what can you do when a mistake leads to an overpayment of tax in a given tax year? Maybe you have not claimed tax relief on pension contributions made, or perhaps you forgot to offset an allowable expense in relation to your rental or self-employment business. Whatever the mistake may be, how do you go about fixing it? The answer all depends on which tax year the error relates to.
Submitting an amended tax return
If you need to correct a mistake on your Self-Assessment Tax Return, an amendment can be made, providing it’s still within the relevant time limit. The deadline for an amendment is the first anniversary of the tax return submission deadline – 31 January following the end of the tax year. As an example, for the 2020/21 tax year an amended return can be submitted to HMRC up until 31 January 2023.
Submitting an overpayment relief claim
But what can you do if the tax return amendment window has passed?
Where an error has been made resulting in tax relief not being claimed and the amended tax return submission deadline has passed, you may still be in time to submit what is called an Overpayment Relief Claim.
An Overpayment Relief Claim is made by writing a letter to HMRC to advise them of a past error that has been made. You need to note the tax year(s) the claim is in relation to and state the refund that you believe you are due.
You do not need to have submitted tax returns year-on-year to make a successful Overpayment Relief Claim. For example, if a higher-rate taxpayer has made pension contributions over the last four years, but not claimed the higher-rate tax relief, regardless of whether they have submitted returns previously, an Overpayment Relief Claim would be possible.
However, as with amending your Self-Assessment Tax Return, there are deadlines for submitting an Overpayment Relief Claim. For a given tax year, a claim must be made within four years of the end of the tax year in question. For example, for the 2018/19 tax year, the latest you can submit a claim is 5 April 2023.
Summary
At the time of this blog, if you have made a mistake on a Self-Assessment Tax Return submitted for the 2018/19 tax year or later, and believe that you are due a refund, you are still in time to make a claim for it, and an Overpayment Relief Claim can be submitted. In contrast, for the 2020/21 tax year, a refund can be claimed by an amendment to your tax return for that year.
If you need of any assistance with either amending a tax return you have previously submitted or preparing an Overpayment Relief Claim, please contact us at: mail@ct.me.
Author: Alistair Grant, CT: Personal Tax
