How Far Back Can HMRC Go? The 4, 6 and 20-Year Rules

HMRC can normally go back four years from the end of the tax year to collect underpaid tax. That stretches to six years where the underpayment was caused by carelessness, and 20 years where it was deliberate or where someone never told HMRC they were taxable at all. The same four-year clock applies in reverse: if HMRC has taken too much, you generally have four years from the end of the tax year to claim it back.

The time limits are set in law (mainly the Taxes Management Act 1970 for income tax and Capital Gains Tax) and apply across the UK, including Scotland. What differs in Scotland is the rate used to recalculate non-savings income, not the number of years HMRC can reach back.

Key points

• Four years is the default limit for assessing underpaid income tax, Capital Gains Tax, Corporation Tax and VAT.
• Six years applies if the loss of tax was brought about carelessly — a mistake made without reasonable care.
• Twenty years applies to deliberate behaviour, deliberate concealment, or a failure to notify HMRC that you owed tax.
• Refund and overpayment relief claims also run out four years after the end of the tax year, so old overpayments become unrecoverable.
• Time limits are counted from the end of the tax year, not from the date you filed or the date HMRC noticed.

The normal limit: four years

Where you have taken reasonable care and simply got something wrong, HMRC has four years from the end of the relevant tax year to issue a discovery assessment. Tax years end on 5 April, so the 2026/27 tax year closes on 5 April 2027 and the ordinary deadline for assessing it is 5 April 2031.

This four-year rule is what covers most routine situations: a P11D benefit that was reported late, an untaxed pot of savings interest, a small amount of rental profit missed off a return, or a tax code that quietly under-collected for a year or two. HMRC recalculates the year, issues a demand for the difference, and charges interest from the date the tax was originally due.

Enquiry windows are different — and much shorter

Do not confuse the assessment time limits with the enquiry window. If you file a Self Assessment return on time, HMRC normally has 12 months from the date it receives the return to open an enquiry into it. Once that window closes, HMRC cannot simply reopen the return at will — it has to make a "discovery", meaning new information has come to light that it could not reasonably have known about earlier. The four, six and 20-year rules then set the outer boundary for that discovery.

Careless errors: six years

If the underpayment was "brought about carelessly", HMRC gets six years from the end of the tax year. Carelessness broadly means failing to take the care a reasonable person in your position would take — not fraud, and not deliberate, but not diligent either.

Typical examples HMRC treats as careless include:

• Guessing at figures rather than using records.
• Repeating the same error year after year without checking it.
• Claiming expenses that were obviously private, such as a family holiday put through a business.
• Ignoring an obvious gap — for example knowing a rental property produced a profit but never declaring it.
• Failing to act on a letter or statement that clearly showed something was wrong.

Where the six-year rule applies, HMRC can also charge a penalty on top of the tax and interest. Penalties for careless behaviour are a percentage of the extra tax, and the percentage is reduced for telling HMRC before it asks and for co-operating fully.

Deliberate behaviour: 20 years

Twenty years is the longest ordinary time limit, and it applies where the loss of tax was brought about deliberately. Deliberate means a conscious choice — knowingly leaving income off a return, inventing expenses, or using a false document. If steps were also taken to hide the behaviour, HMRC calls it "deliberate and concealed" and penalties are higher again.

Crucially, the 20-year rule also catches a failure to notify. If you had taxable income or gains and never registered, never filed and never told HMRC, the 20-year limit can apply even without dishonest intent, because no return was ever submitted for HMRC to enquire into. This is the rule that bites on long-running undeclared side income, cash work, unreported property sales and landlords who never registered.

The same 20-year limit exists for VAT where a business should have registered and did not, and for Corporation Tax where a company failed to notify HMRC that it was chargeable.

Offshore income and gains: up to 12 years

There is an additional limit for offshore matters. Where the underpayment involves offshore income, assets or transfers and the behaviour was careless (or even innocent error rather than deliberate), HMRC has up to 12 years from the end of the tax year to assess income tax and Capital Gains Tax. Deliberate offshore behaviour still falls under the 20-year rule.

The time limits at a glance

Worked example: six years of missed rental profit

A higher-rate taxpayer in England lets a flat and reports the rent, but consistently deducts the full mortgage payment including capital repayments. The result is £4,000 of profit a year that should have been taxed but was not, over six tax years.

1. Tax per year: £4,000 × 40% = £1,600.
2. Six years: £1,600 × 6 = £9,600 of tax.
3. Penalty: if HMRC treats the errors as careless and applies 15% of the tax, that adds £1,440.
4. Interest: charged on each year's tax from its original due date, so the oldest year carries the most.

Total exposure comfortably exceeds £11,000 before interest, from an error worth £1,600 a year. If HMRC instead argued the behaviour was deliberate, it could look at up to 20 years and apply a far higher penalty percentage. A Scottish taxpayer would face the same six-year window, but the tax would be recalculated at the Scottish higher rate of 42% (or advanced rate of 45% above £62,430), giving £1,680 a year at 42% instead of £1,600.

Companies, VAT and PAYE

The pattern repeats across the other main taxes, so a director with a limited company faces the same three-tier structure:

• Corporation Tax: four years from the end of the accounting period, six if careless, 20 if deliberate or the company never notified HMRC it was chargeable. HMRC's enquiry window is normally 12 months from the filing deadline.
• VAT: assessments are generally capped at four years, extended to 20 years for deliberate under-declarations or a failure to register when turnover passed the £90,000 registration threshold. Reclaiming input VAT you missed is also subject to a four-year cap.
• PAYE: employer underpayments follow the same four, six and 20-year framework, and an employee's own underpayment can be collected through a revised tax code for a later year.

Directors should also remember that dividends above the £500 dividend allowance are taxable at 10.75%, 35.75% or 39.35% depending on your band — undeclared dividends are one of the most common triggers for a discovery assessment years after the event.

Refund claims also run to four years

The four-year rule cuts both ways. To reclaim tax you have overpaid, you normally have to make the claim within four years of the end of the tax year concerned. Miss it and the money is gone, no matter how clear the overpayment was. That is why old, unclaimed reliefs quietly expire.

The four-year backdating limit is why Marriage Allowance can be claimed for the current year plus the four previous years — worth £252 a year at current rates, or up to £1,260 in total. The same limit applies to unclaimed uniform and flat-rate expenses, working-from-home relief, mileage shortfalls and unclaimed higher-rate pension relief. Where a Self Assessment return was filed, amending it is only possible for about 12 months after the filing deadline; after that, the route is an overpayment relief claim in writing within the four years.

What it means for you

Three practical consequences follow from the rules above.

Keep records for longer than you think

If HMRC can look back six years, records from three years ago are not enough to defend yourself. Broadly, self-employed people and landlords are expected to keep records for at least five years after the 31 January filing deadline for the year, employees and other individuals for around 22 months after the end of the tax year, and companies for six years from the end of the accounting period. If there is any chance of a longer enquiry, keeping more for longer is the cheaper option.

Behaviour drives the length, not the amount

HMRC does not pick four, six or 20 years based on how much tax is at stake — it is decided by whether the error was innocent, careless or deliberate. That is also what sets the penalty. Showing that you took reasonable care, took advice or relied on records is what keeps a case inside the four-year window.

Telling HMRC first reduces the damage

An unprompted disclosure attracts a lower penalty percentage than one made after HMRC writes to you, and in some cases the penalty can be reduced to nil for a careless error disclosed voluntarily. Tax and interest still have to be paid. You can make a voluntary disclosure to HMRC online. Interest runs from the original due date at HMRC's published late-payment rate, which is linked to the Bank of England base rate.

None of this changes if you live in Scotland or Wales: the assessment windows are identical, but the recalculated tax uses Scottish rates for non-savings income where applicable.

What to do next

If you have had a letter, a P800 or a nagging feeling that a past year was wrong, start by working out whether tax is actually owed or owing. Run a quick check with our underpaid tax checker to see whether your figures line up with what should have been collected. From there, you can sanity-check a single year's liability with the income tax calculator, or rebuild a year's profit with the self-employed tax calculator if the issue sits in a business or property.