The four assessment windows
HMRC's Compliance Handbook sets out a ladder of time limits. The normal 4 year limit applies to all taxes. It extends to 6 years where tax was lost through the careless behaviour of the taxpayer or someone acting on their behalf, and to 20 years where the behaviour was deliberate. On top of that sits the 12 year offshore limit, covering income tax, capital gains tax and inheritance tax where the lost tax involves an offshore matter or offshore transfer. For income tax and capital gains tax it applies from 2015/16 even where you took reasonable care, and for 2013/14 and 2014/15 only where there was carelessness. One carve out: the 12 year limit does not apply where HMRC had already received relevant overseas information in time to identify the loss within the normal 4 or 6 year window.
Why offshore cases reach further back
The long offshore window exists because HMRC now receives automatic data from more than 100 jurisdictions under the Common Reporting Standard, and it uses that data to send one-to-many nudge letters about overseas income and gains. A nudge letter is not an investigation, but it is a formal signal that HMRC holds data about your offshore affairs, and how you respond matters. Our guide to HMRC nudge letters and the Worldwide Disclosure Facility covers the response options.
What it means if you need to correct something
If you come forward voluntarily through the Worldwide Disclosure Facility, the number of years you must disclose follows the same behaviour based limits: broadly 4 years with reasonable care, 6 where careless, up to 12 for offshore matters and 20 for deliberate behaviour. Penalties are behaviour based too, from nil with reasonable care up to 200% of the tax in the worst offshore cases, with interest running on late tax. Classifying behaviour correctly is the single most valuable judgement in the whole process, and if the missing years involve foreign income, our guide to Self Assessment for expats explains what should have been reported.