Section 43B sets three main limits: Cap on the benefit. If the total reduction from the out of time actions would exceed the additional liability from the assessment, the excess is not available to reduce any liability (section 43B(3)). SACM9015 gives the example of an enquiry adding £1,500 of tax, so any out of time claims or elections can save at most £1,500. Other people's consent. If the action would alter another person's liability, it needs their written consent, or their personal representatives' consent if they have died (section 43B(1)). No chain reaction. If the action increases another person's liability, an assessment on that person because of the increase does not itself trigger section 43A (section 43B(2)). Where the cap restricts reductions across more than one year or person, HMRC specifies how the limited amount is apportioned unless those concerned give a joint notice within 30 days (section 43B(4) and (5)).

Consequential claims after a late HMRC assessment

When HMRC makes a discovery assessment for an earlier year and the loss of tax was not caused by careless or deliberate behaviour, section 43A of the Taxes Management Act 1970 lets you make, revoke or vary claims, elections, applications and notices for that year that would otherwise be out of time. You have until one year after the end of the tax year in which the assessment is made, and the tax saved cannot exceed the extra tax assessed. If the loss was careless or deliberate, only a narrower right to claim reliefs applies.

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Why are consequential claims needed?

Most income tax and capital gains tax claims must be made within 4 years of the end of the tax year (section 43(1) TMA 1970), and many elections have shorter deadlines. HMRC can assess much later: 4 years in ordinary cases and longer where there is carelessness, deliberate behaviour or an offshore matter. Without a special rule, a taxpayer could face an assessment for a year in which it is too late to claim a relief or make an election that would have reduced the bill.

HMRC’s Self Assessment Claims Manual at SACM9005 is clear that time limits for claims are not extended simply because an enquiry is open. The extension comes only from the consequential claims rules, which are triggered by the assessment or amendment itself. Our page on time limits for tax claims covers the normal deadlines.

When does section 43A apply?

Section 43A(1) applies where HMRC makes an income tax or capital gains tax assessment under section 29 (a discovery assessment), and the assessment is not made to make good a loss of tax brought about carelessly or deliberately by you or someone acting on your behalf.

Section 43C(2) extends the same rules to amendments of a return made by HMRC under sections 28A or 28B, typically in a closure notice at the end of an enquiry. SACM9005 adds that HMRC applies the same approach to contract settlements, and that the settlement figures should allow for any relief the taxpayer would have been entitled to.

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What can be made, varied or revoked?

Under section 43A(2), any relevant claim, election, application or notice that could have been made within the normal time can be made or given within one year from the end of the tax year in which the assessment is made. A relevant item previously made can be revoked or varied in the same manner and with the consent of the same people, unless the law makes it irrevocable.

Section 43A(3) and (4) define “relevant”. The item must relate to the year assessed, or be made by reference to an event in that year, and it must have or be capable of having the effect of reducing either:

the increased liability resulting from the assessment; or
any other liability of the person for the year assessed, or for any later year ending not later than one year after the end of the tax year in which the assessment was made.

Section 43A(2A) excludes elections to transfer married couple’s allowance (sections 47 to 49 of the Income Tax Act 2007), the marriage allowance election under section 55C of that Act, and the election to rebase assets to 1982 under section 35(5) of the Taxation of Chargeable Gains Act 1992.

What limits apply?

Section 43B sets three main limits:

Cap on the benefit. If the total reduction from the out of time actions would exceed the additional liability from the assessment, the excess is not available to reduce any liability (section 43B(3)). SACM9015 gives the example of an enquiry adding £1,500 of tax, so any out of time claims or elections can save at most £1,500.
Other people’s consent. If the action would alter another person’s liability, it needs their written consent, or their personal representatives’ consent if they have died (section 43B(1)).
No chain reaction. If the action increases another person’s liability, an assessment on that person because of the increase does not itself trigger section 43A (section 43B(2)).

Where the cap restricts reductions across more than one year or person, HMRC specifies how the limited amount is apportioned unless those concerned give a joint notice within 30 days (section 43B(4) and (5)).

What if the loss was careless or deliberate?

Section 43A does not apply, but two narrower rules do. Section 36(3) says that in an assessment made under the 6 or 20 year limits, effect is given to any relief or allowance you would have been entitled to on a claim made in time. SACM9010 explains that this covers claims and increasing a previous claim, but it does not allow elections, and it does not cover, for example, negligible value claims under section 24(2) of the Taxation of Chargeable Gains Act 1992 or claims for irrecoverable loans to traders under section 253. Section 43C(1) applies the same rule to return amendments made because of careless or deliberate behaviour.

Separately, section 43(2) allows any claim that could not have been allowed but for the assessment to be made before the end of the tax year following the one in which the assessment was made. SACM9005 notes this applies whatever the behaviour.

Can HMRC assess again after a consequential claim?

Yes. If an adjustment by assessment is needed to give effect to a consequential claim, or results from allowing one, section 43C(4) says it is not out of time if made within one year of the final determination of the claim.

How does the deadline work in practice?

Illustration only. In February 2027 HMRC makes a discovery assessment on Tom for 2022/23, within the normal 4 year limit, adding £3,000 of capital gains tax. HMRC accepts Tom was not careless. The assessment is made in the 2026/27 tax year, so Tom has until 5 April 2028 to make any relevant claim or election for 2022/23. Tom realises he never made a claim that would save £4,000. He can make it, but section 43B(3) caps the saving at £3,000. Had the assessment been made because Tom was careless, he could still claim the relief within the assessment under section 36(3) but could not make an out of time election.

Do the same rules apply to companies and VAT?

Companies have equivalent rules in paragraphs 61 to 65 of Schedule 18 to the Finance Act 1998. CH55200 explains that paragraph 62 allows claims, elections, applications and notices where the assessment is not due to careless or deliberate behaviour, while paragraph 65 allows only claims or applications where it is. CH55100 says there are no consequential claim provisions for VAT assessments.

What mistakes do people make?

Missing the deadline by counting from the year being assessed rather than the year in which the assessment was made.
Expecting a relief to generate a refund larger than the extra tax assessed.
Assuming an open enquiry keeps claim deadlines open.
Trying to make an election out of time when the assessment is for careless behaviour.
Overlooking that a change affecting a spouse or partner needs their written consent.

Where a figure was simply overpaid in an earlier year, overpayment relief may be more suitable. For the time limits that trigger these claims see how far back HMRC can go.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.