You may be able to claim overpayment relief!

As official corporate tax accountants, we know firsthand how easily errors could potentially slip into a tax return filing. So, for our clients who are determined to manage their own tax returns, we thought this quick-read blog article on what your recourse maybe if you made an inadvertent error on your tax return might be helpful.

Usually, you have up to 12 months from your tax due date to make any amendments to the filing. After this time it may not be possible to amend your tax return. However, you may be able to claim overpayment relief so that you aren’t unduly penalized. And good news, overpayment relief can be claimed up to 4 years after the erroneous return was filed! (E.g. by 5 April 2024 for the 2019/20 tax year).

 

So, would you qualify for overpayment relief?

Here’s a quick, high-level – and very general – guide to help you assess whether you may be eligible for overpayment relief … If your tax error is a result of filing decisions that you made and caused you to pay a higher tax rate, then overpayment relief is not available to you. So, let’s say you run your business from a home office, and instead of calculating the business proportion of your entire household running costs you instead decide to use a flat rate deduction which results in a higher tax rate. In this case, you cannot later claim overpayment relief to qualify for the lower tax rate.

So, when does overpayment relief apply? When excessive taxes are paid due to a genuine error in the figures you filed on your return. 

For example, you included a sizeable capital gain of £25,920 on your taxes, but you later realize that you made a typo and incorrectly entered £29,520. In this case, overpayment relief may be available to you!

There are several specific stipulations for how you must claim any overpayment relief including, for example making the claim in writing, identifying the tax year or accounting period for which the overpayment or excessive assessment was made, and stating the grounds on which you consider that the overpayment or excessive assessment occurred (For the full list of claim criteria and instructions consult the HMRC’s Self-Assessment Claims Manual).

But the bottom line is, for genuine filing errors, you may qualify for a reprieve! 

 

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