How Far Back Can HMRC Go If The Taxpayer Puts Their Head In The Sand?

Question

How far back can HMRC go if the taxpayer adopts a head in the sand approach to their tax affairs?

Answer

If the taxpayer does not deal with their tax affairs and chooses to avoid them, then HMRC can look into matters going back 20 years.

This requires no dishonesty or even a positive act on the part of the taxpayer. Simply, it can be deemed a deliberate act if the taxpayer prioritises other matters and avoids dealing with their legal tax obligations, such a filing tax returns when required to do so.

A deliberate act, as opposed to a careless act, extends the period that HMRC can examine from 6 to 20 years.

This head in the sand impact on a taxpayer’s tax affairs was considered in the case of Milligan v Revenue and Customs [2025] UKFTT 498 (TC):

52.         We consider that even if Mr Milligan did not precisely know what he needed to do with respect to his tax affairs in the tax years in question, despite having previously filed tax returns, Mr Milligan “head in sand” approach meant that he chose to ignore his tax obligations in circumstances where we consider that he at least knew that he should have taken steps to find out what the correct position was with regard to his tax affairs.

53.          That was not merely carelessness. We find that it was a deliberate (but not dishonest) choice not to engage with his tax responsibilities and, instead, prioritise other issues in his life. We find that the behaviour which led to the loss of tax was, therefore, deliberate.

54.         Given that we find that the behaviour which led to the loss of tax was deliberate, we find that the assessments for the tax years 2000/01 to 2006/07 were raised within twenty years of the end of the relevant tax years and so were validly raised. We have already concluded as noted above that the assessments for 2007/08 and 2008/09 were also validly raised.