You can ask HM Revenue and Customs (HMRC) to cancel tax you owe (‘arrears’) if you think they’ve made a mistake because both of the following apply:
- they did not act on information they had
- there was a delay in HMRC asking you for the tax
You can do this by asking HMRC to write off the tax under an extra-statutory concession (ESC A19) if you owe:
- Income Tax, for example because you were on the wrong tax code
- Capital Gains Tax
- Class 4 National Insurance contributions
HMRC have limited authority to cancel tax you owe, even if the tax arrears are due to their mistakes.
You can ask HMRC to write off the tax you owe if all of the following apply:
HMRC have not used information provided to them, for example about a change of job
HMRC told you about the tax you owe more than 12 months after the end of the tax year in which they received your information - tax owed from the last tax year is unlikely to be written off no matter when HMRC received information about your change of circumstances
- you have a reasonable belief that your tax affairs are in order for the years you owe the tax and HMRC agree
The tax information could have come from:
- your employer
- the Department for Work and Pensions (DWP)
Tax arrears from the last tax year
HMRC will only consider cancelling tax you owe from the last tax year in exceptional circumstances and if all of the following apply:
HMRC failed to act on information you gave them about the same source of income more than once
- it’s the first time HMRC have told you that you owe tax for an earlier tax year - the reason you owe tax for an earlier tax year and the last tax year must be the same
- you have a reasonable belief that your tax affairs were in order for the years you owed the tax and HMRC agree
How to apply
You can apply by calling or writing to HMRC.
You should do this before you pay any of the tax you owe. But if you’ve already made a payment, HMRC may be able to refund it.
You must tell HMRC:
- which arrears you’re disputing, including the tax year
- the information HMRC should have acted on and when it was provided
- why you thought your tax was up to date
What happens next
HMRC will review your application against their eligibility criteria and your tax records and decide if the tax you owe should be cancelled.
If you disagree with HMRC’s decision
You can call or write to HMRC and ask them to review their decision if you do not agree with the outcome.
You need to explain why you disagree with HMRC’s decision.