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HMRC: tax refund identity checks
HMRC carry out risk assessments on all repayment requests, including Self Assessment tax returns which result in a tax refund being due. Unfortunately, HMRC have found that some repayment requests are fraudulent. HMRC therefore issue letters to taxpayers where they think the repayment request may not be genuine. These letters ask the taxpayer to prove their identity before HMRC pay the refund.
We look at what you should do if you receive one of these letters.
What do HMRC do when I submit a tax return resulting in a repayment of tax?
When you submit a Self Assessment tax return resulting in a repayment of tax being owed to you, HMRC do routine checks to ensure the claim is genuine and to identify potential problems.
Where HMRC’s systems suggest that your claim may not be legitimate, they will contact you by letter to confirm your identity.
⚠️ Do not worry if you receive a letter from HMRC. HMRC’s systems assess risk. This sometimes mean that they end up writing to innocent taxpayers as well as individuals who are acting fraudulently. It does not mean that you have done anything wrong. It is important that you follow the guidance below, though.
What will HMRC ask me to do?
If HMRC believe your repayment claim may not be genuine, they normally (but not always) issue an initial letter. This letter will tell you that HMRC believe your Unique Taxpayer Reference (UTR) may have been used to submit a potentially fraudulent repayment claim.
If you receive this letter and you submitted the Self Assessment repayment claim, you should telephone HMRC within 30 days.
⚠️ It is important that you contact HMRC, otherwise HMRC will cancel your repayment claim and close down your Self Assessment record and UTR.
Sometimes HMRC skip this initial letter and go straight to asking you to prove your identity, as explained below.
What happens next?
If you telephone HMRC after receiving the initial letter, they will send you a second letter. This will ask you to provide evidence of your identity and to complete a questionnaire.
It is important to respond as requested to HMRC’s letter.
Contact: Joanne Walker (click here to Contact Us)
First published: 31/03/21