HMRC processing issues affecting Overseas Workday Relief claims

The ATT and CIOT are aware of problems with the processing of 2025/26 Self Assessment tax returns containing claims for Overseas Workday Relief (OWR) where the transitional provisions apply. 

Box 47 – maximum OWR available under the financial limit 

We understand that some tax returns are not being processed automatically where box 40 (OWR election) and/or box 41 (OWR claim) together with box 43 (transitional provisions) of the residence and foreign income and gains (FIG) regime pages are ticked. 

Although the return may be logged by HMRC as received, the information from the return may not be captured, with the taxpayer's Self Assessment balance consequently showing as £0. 

Members who have submitted returns containing OWR claims should therefore check that the return has been processed correctly by HMRC and that the taxpayer's Self Assessment record reflects the information submitted. 

We understand that contacting HMRC should result in the return being added to a worklist for processing. However, this does not necessarily resolve the issue, as there have also been cases where the OWR claim has subsequently been rejected. Some taxpayers have reportedly received letters from HMRC stating that their claim cannot be processed because no entry has been made in box 47 (the maximum relief available under the financial limit). This is inconsistent with HMRC's tax return helpsheet for the residency pages, which says “if you put an ‘X’ in box 43 because you qualify for the OWR transitional provisions, you do not need to consider the financial limit and must not put anything in box 47”. We also understand that these letters are not always being copied to authorised agents.

HMRC has confirmed that the issue has been raised for investigation and that it will provide an update in due course. For now, there is no official advice on how best to submit claims to ensure they are processed correctly nor a timescale to resolve those already submitted. 

Next steps

HMRC is aware of the issues and is investigating. However, until a solution and timescale are confirmed, members should review relevant returns already submitted, monitor clients' Self Assessment records and follow up with HMRC where a return does not appear to have been processed correctly. 

Where the processing problem is likely to delay a repayment or otherwise affect the client's tax position, advisers should consider managing clients' expectations about the potential for delays, particularly while the timing of an HMRC resolution remains uncertain. 

We also suggest that clients are advised to pay any tax due by 31 January 2027 based on the liability on the submitted tax return, even if HMRC’s systems show £0 due, to avoid late payment interest/penalties. 

We will provide a further update when more information is available.