New Time limits for corrections and assessments

From 1 April 2010, the time limit for both VAT assessments and adjustments will increase from three to four years. Transitional arrangements introduced on 1 April 2009 generally allow HM Revenue & Customs and taxpayers to go back to 1 April 2006. This will remain the case until 1 April 2010, when the full four year time limit will come into effect.

The new time limit will apply not only to VAT, but also to income tax, corporation tax and capital gainst tax.

The new rules also extend the time limit for claiming bad debt relief from three and a half to four years, but no change will be made in respect of assessments in fraud cases, where the current 20 year time limit will continue.