When do hmrc time limits apply?

[BrilloPad]

Certainly nobody should rely on what they read on the internet.

Indeed. You get what you pay for.

[Wayt]

Where did you read it?

Nowhere official. Just on a ten year old thread on another forum. I have no idea if the poster had any expertise in this field. Certainly nobody should rely on what they read on the internet. People must take proper professional advice if they have a specific problem.

[BrilloPad]

I was just curious because I always thought that the 20 year rule was the cut off point regardless of the circumstances. But then I read somewhere that if there was no disclosure HMRC could ignore the time limits and claim discovery after any period of time. This made no sense to me.

I could potentially see hmrc doing this in the case of the 4 and 6 year time limits but I can't see how they could justify it after 20 years because by its very definition non disclosure would be classed as deliberate concealment/fraud.

I can't get my head around how they could say that the time limit for fraud is 20 years but then after 20 years say "You defrauded us by not telling the truth so the time limit doesn't apply".

Where did you read it?

[Wayt]

I was just curious because I always thought that the 20 year rule was the cut off point regardless of the circumstances. But then I read somewhere that if there was no disclosure HMRC could ignore the time limits and claim discovery after any period of time. This made no sense to me.

I could potentially see hmrc doing this in the case of the 4 and 6 year time limits but I can't see how they could justify it after 20 years because by its very definition non disclosure would be classed as deliberate concealment/fraud.

I can't get my head around how they could say that the time limit for fraud is 20 years but then after 20 years say "You defrauded us by not telling the truth so the time limit doesn't apply".

[BrilloPad]

Hi thanks

No don't worry. I'm not thinking of doing anything. My conscience is entirely clear. It wouldn't be worth the hassle to do anything like that. Idiotic in fact.

I like being able to sleep at night.

There is just so much conflicting information out there about time limits. The example I gave was an extreme one just so I could get my head round when they do apply.

Phew!

Just so you know, HMRC are currently claiming fraud where everything was declared on tax return! More than 7 years after. Sadly I can't say anything about the case, even the name. However HMRC will lie, cheat and try every dirty trick in the book.

[Wayt]

Hi thanks

No don't worry. I'm not thinking of doing anything. My conscience is entirely clear. It wouldn't be worth the hassle to do anything like that. Idiotic in fact.

I like being able to sleep at night.

There is just so much conflicting information out there about time limits. The example I gave was an extreme one just so I could get my head round when they do apply.

[BrilloPad]

HMRC cannot go back more than 20 years in any circumstances.

However, whatever you are thinking of doing, please don't do it. This board is littered with examples of people who have paid the penalty. Even for so much as tax avoidance. You want to be looking over your shoulder for the rest of your life?

[Wayt]

As I understand it the time limits for hmrc to make an assessment are 4 years if you've taken reasonable care, 6 years if you've been negligent and 20 years if you've acted dishonestly/fraudulently.

But I've also heard that time limits only apply to those who have made a full disclosure on a tax return. I get this in relation to the 4 and 6 year time limit but it this makes no sense in relation to the 20 year time limit for fraud. Because by definition if you have deliberately concealed something from the taxman then you have not made a full disclosure.

So as a hypothetical example, X tries going self employed but it doesn't work out and after six months decides to call it a day. He did not register with hmrc as self employed and did not declare any of his income during this period of self employment.

21 years later hmrc find out about this. Will the 20 year time limit apply to X, even though he made no disclosure? Or is it simply the case that hmrc cannot make an assessment for tax due from more than 20 years ago regardless of the circumstances?