The reduction in the time period to which the questions refer was part of a package of measures introduced in 2003 to deal with the following matters: There was no general statutory right to repayment of overpaid tax — and in some circumstances overpayments were not refundable. Interest on repayments was paid in very limited circumstances and was not paid in respect of PAYE overpayments. In the absence of a statutory right to repayment, the courts were developing, on a case-by-case basis, a common law right, without any time limitation.
The scheme that was introduced was not ill-judged. It was devised after careful and detailed consideration and was designed to achieve the necessary balance between establishing a fair and uniform system for taxpayers, including parity of treatment between PAYE and self-employed taxpayers, while, at the same time, providing necessary protection for the Exchequer from exposure to claims going back many years. Four years is a reasonable period for taxpayers to sort out their tax affairs and in the great majority of cases does not present any difficulty for taxpayers claiming repayments and should not result in any losses to taxpayers who take responsibility in the matter.