New rules for claiming tax refunds using an agent

The new rules are aimed at managing the activities of tax refund companies. But they may affect you if you use a tax refund company to claim a tax refund from HMRC. This is what we understand about the requirements, from a taxpayer perspective.

Claiming a tax refund from HMRC using a repayment agent

It is possible to claim a tax refund from HMRC in a variety of circumstances. Depending on why you are claiming the tax refund, the form or process you use differs. Although it is possible to make the claim by yourself, you may wish to use a repayment agent or a tax refund company (from now on we will just refer to tax refund companies).

Some tax refund companies take their fee for making the tax refund claim by getting HMRC to send the tax refund to them. They then deduct their fee, before sending the balance of the tax refund to you. To give them permission to do this, they get you to sign a nomination box on the tax refund claim form.

Unfortunately, some tax refund companies engage in concerning practices in relation to collecting signatures and placing them on forms. We discuss an example in our article on R40 PPI tax refund claims.

While HMRC’s Charter states that everyone is entitled to use an agent if they wish, HMRC have been taking some steps to try to protect taxpayers from unscrupulous agents. The new rules we discuss in this article are part of this. Advanced electronic signatures are meant to provide additional security over and above ordinary electronic signatures, and – HMRC say – even handwritten (wet) signatures.

When the new rules apply

The rules come into play if all of the following apply:

• You use a tax refund company to submit a tax refund claim on your behalf;
• The tax refund company charges you a fee for their services;
• The tax refund claim is made on either a P87, a R40 or a Marriage Allowance Transfer Claim print and post form;
• You nominate the tax refund company to receive the tax refund on your behalf;
• The tax refund claim form reaches HMRC on or after 6 April 2025.

  The new rules do not affect you if you make the tax refund claim by yourself. They do not affect you if you use a tax refund company to make the claim, but you receive the tax refund direct from HMRC and pay the tax refund company separately.

The new rules

Advanced electronic signatures

From 6 April 2025, a tax refund company that wishes to receive tax repayments on your behalf must use an advanced electronic signature process to obtain your signature for the tax refund claim form and nomination.

This means the tax refund company will have to send you the tax refund claim form digitally. You will have to sign the form digitally using an advanced electronic signature solution that the tax refund company has purchased. Signing the form will demonstrate your approval of its content and also your authorisation of the agent to receive the tax refund on your behalf.

What to do if you are digitally excluded

If you are unable to sign the tax refund claim form with an advanced electronic signature for whatever reason (you are ‘digitally excluded’), you need to get permission from HMRC to use a handwritten (wet) signature on a paper tax refund claim form. We understand that HMRC accept a wide variety of situations can make you digitally excluded – for example, age, disability, location etc.

You should telephone HMRC’s income tax helpline on 0300 200 3300 to discuss why you are unable to sign using an advanced electronic signature and to state that you wish to sign a paper tax refund claim form and nomination by hand, using a wet signature.

If, based on what you tell them, HMRC agree that you are digitally excluded, you will be allowed to sign a paper tax refund claim form using a wet signature. If you do sign a paper tax refund claim, you should make sure that the form has been fully completed and that you carefully check all of the details entered before you sign the form. You should never sign a blank form. 

   You must speak to HMRC before you sign the paper tax refund claim form. The tax refund company cannot contact HMRC on your behalf.

Future tax refund claims

You only need to contact HMRC once about the fact that you cannot use an advanced electronic signature. They should create a ‘digitally excluded’ marker on your tax record. While digital exclusion can also be important in other areas of the tax system, this marker will be for income tax purposes only.

The marker means that if you make any income tax refund claims in future years, you can continue to sign paper tax refund claim forms using a wet signature.

If, in the future, you stop being digitally excluded and you wish to interact digitally with HMRC, you must telephone HMRC, on their income tax helpline, to let them know.

What is an advanced electronic signature?

An advanced electronic signature is a type of digital signature. It provides additional security and reliability, because it must:

• be uniquely linked to the person signing the data in electronic form and be capable of identifying them
• give the person signing sole control of the signature data
• be able to detect any changes made to the signature data afterwards

For further assurance, HMRC will only accept forms signed with an advanced electronic signature, where that signature is less than six months old.

The use of advanced electronic signatures means that HMRC will be able to carry out checks on tax refund companies. They will be able to check that overall, the company has purchased an advanced electronic signature solution. They can also carry out detailed checks to ensure that the tax refund company has genuinely obtained an advanced electronic signature from you, for each tax refund form it submits.

More information

Our website contains detailed guidance about tax refund claims, including:

• Tax refund companies
• Marriage allowance tax refunds
• Form R40
• Tax relief for employment expenses

HMRC have published guidance about the rules that apply to tax refund companies that wish to receive income tax repayments on behalf of taxpayers on GOV.UK.