New time limits came into force on 1 April for direct taxes. The normal six-year time limit (or five years and 10 months) was replaced by a four-year time limit for both assessments and claims. HMRC will only have four years in which to raise assessments in respect of a particular tax year – except that this is extended to six years for careless behaviour and 20 years for deliberate behaviour. The 20-year time limit will still apply to cases of failure to notify and failures in respect of tax avoidance schemes.

The meaning of careless behaviour in this context is obviously crucial, and it is not clear whether this has the same meaning as negligent conduct under the existing rules or whether it is a somewhat looser test.  

The position is not quite the same for VAT where careless behaviour also has a four-year time limit – and none of these time limits apply to assessments under class 1, 1A and 2 National Insurance contributions.