HMRC is writing to taxpayers who have claimed business asset disposal relief (BADR) in tax returns for 2020/21 where the claim, according to HMRC’s records, takes the amount over the £1m lifetime limit.
The lifetime limit for BADR was reduced to £1m from 11 March 2020, having previously been set at £10m for disposals between 6 April 2011 and 10 March 2020. The nudge letters suggest that HMRC has reviewed claims for previous years and added up the running total, which has then been compared against the current £1m limit.
The letters ask taxpayers to check their claims, and to contact HMRC if they believe their claims for 2020/21 to be correct. The letters note that failure to act could lead to enquiries and penalties for inaccurate returns.
HMRC is writing to taxpayers who have claimed business asset disposal relief (BADR) in tax returns for 2020/21 where the claim, according to HMRC’s records, takes the amount over the £1m lifetime limit.
The lifetime limit for BADR was reduced to £1m from 11 March 2020, having previously been set at £10m for disposals between 6 April 2011 and 10 March 2020. The nudge letters suggest that HMRC has reviewed claims for previous years and added up the running total, which has then been compared against the current £1m limit.
The letters ask taxpayers to check their claims, and to contact HMRC if they believe their claims for 2020/21 to be correct. The letters note that failure to act could lead to enquiries and penalties for inaccurate returns.
