The new legislation will apply from April 2010
When the Finance Bill 2008 becomes law, millions of taxpayers will see their right to reclaim overpayments of tax cut to just four years.
The existing system allows overpaid income and capital gains tax to be reclaimed for five years and ten months after the end of the year to which the claim relates.
HMRC however will be able to go back six years when reclaiming money from the public.
Have you paid too much tax and tried to get it back?
What was your experience of that process?
Do you check your tax code and whether you've paid the correct amount?
Do you think the system is fair?
We asked for your comments, a selection of which are below.
MOST RECENT COMMENTS:
Having worked in this field for over 6 years now, I have seen many changes in the taxation system, most of which are unashamedly in favour of HMRC. We claim overpayment of tax going back 6 years for many taxpayers who are not aware that they are entitled to make a claim, and who do not understand the regulations that enable them to do so. Sometimes these taxpayers are entitled to claim thousands of pounds back from HMRC and to now deny them the right to go back 6 years is just another way of generating income for HMRC. They should in my opinion have extended the period to 8 years as HMRC have other legislation open to them to go back even further than the 6 years currently allowed for themselves, in the form of "discovery" and other powers. We are all equal but some government organisations are definitely more equal than others!
HMRC calculations have omitted entries I have made for reliefs in previous years, resulting in overpayment of tax. Using the Comprehensive Tax Calculation Guide, I have been able to point out their errors and recover the overpaid tax. The Tax Form format has changed for 2007-2008, but a comprehensive calculation guide is not available. The calculation summary notes SA110(2008) do not cover all situations and I believe that they are unfit for purpose as they state a number of situations where they cannot be used. Also, page TSCN 16 states that in some circumstances the calculations may result in too much tax being paid. I have foreign dividend income received without foreign tax being deducted. This is not in the exception list, but does not appear to be taken into account in the calculations, so if I use them to calculate my own tax, am I liable to a fine for incorrect calculation? My only options are trust HMRC calculations (which I don't) or pay a tax advisor to do it which would likely cost far more than any tax overpayment!
The income tax system is particularly biased against people whose weekly earnings vary a lot and who work for more than one company. They nearly always overpay substantially and then have to calculate and claim their tax refund at the end of the year. Depending on the tax office, I have found this can take a lot of time and persistence. Incidentally, pages 271/2 of BBC2 weekend teletext are very helpful here.
It is certainly not fair. As your contributor said the period should be the same for both sides.
Regarding unequal periods for going back for adjustments that individuals and the tax man will have. A similar imbalance was introduced a few years ago with VAT. A business can claim back 3 years but the VAT inspectors can claim back 6 years. This is fundamentally unfair: the government seems to increasingly regard British citizens in much the same way as the banks regard their customers. I expect my taxes and other dues to be applied fairly and dislike being regarded as a money box to be raided.
It's totally iniquitous, an absolute cheek. How can the Government justify this six year/four year split in their favour, it would be more just if it were the other way round as most of the tax code errors are of their own making anyway. In fact, it's daylight robbery - are they really so strapped for cash that they have to steal from us now?
Sandie, Bury St Edmunds
WELL WHAT A SURPRISE, that while the State can claw back tax and persecute people for 6 years, this ghastly grabbing government now propose REDUCING to 4 years the back tax that can be reclaimed by we ordinary plebs. So much for "equality". Don't be surprised if evasion and non-compliance skyrockets.
The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.