Have you had a worrying letter from HMRC about your self assessment tax rebate? You’re not alone
There’s been a notable increase in the number of taxpayers receiving follow up letters from HMRC regarding their self assessment tax rebate claim.
They’re not notifications of an investigation into your return, but their language is quite threatening and states severe consequences if you don’t respond.
What do the HMRC letters actually ask for?
Part of HMRC’s job is to ensure the authenticity of any tax relief claims and prevent fraud. This is the intention of these letters.
There are two different versions landing on self assessment taxpayers’ doormats at the moment.
1. One states that your Unique Taxpayer Reference (UTR) number “may have been used to submit a potentially fraudulent repayment claim.” An alarming thought, in itself, considering the layers of security involved in setting up and activating your tax account using this UTR.
You’re asked to call HMRC on 0300 200 3310 within 30 days to sort this out and are told that you’ll have to provide additional ID information once this conversation has taken place.
Many taxpayers are finding the final two paragraphs problematic:
“If we do not hear from you, we will cancel the repayment claim and close down the SA record and UTR.
“Failure to respond to this letter will result in additional checks being applied to any claim made under the Self-Employment Income Support Scheme. This could delay or stop you from receiving a payment.”
Not only are you worried about someone having stolen your UTR, now there’s the possibility of your self assessment account being closed and not getting the SEISS money you’re relying on.
2. The second version of the letter starts with a large, bold heading: “We need you to verify your Self Assessment repayment claim”. Basically, a security check of your ID.
But it then goes on to deliver the same potential consequences in a text box: “If you do not reply, we will remove you from Self Assessment. We will also carry out additional checks if you have claimed a grant under the Self-Employment Income Support Scheme. This could delay or stop you from receiving a payment.” Your reply must be within 30 days.
This is at the top, before it even lists what you need to provide.
And there’s a lot of documentation involved: complete the R38 form that’s arrived with the letter, recent bank statement for the account in your tax return, 1 proof of address and 2 documents to prove ID (from official lists). If you’re in CIS or also employed under PAYE, there are additional requirements.
What does HMRC say about these SA letters?
HMRC gave this response to a question in a Taxation Readers’ Forum article in March 2021:
“We sometimes undertake routine security checks before issuing a tax repayment to ensure money goes to the correct person. Once documentation proving identity is provided, we will check and process the repayment as soon as possible.
“In line with our wider compliance approaches, these letters are only sent where our risk indicators suggest that the customer or claim may not be legitimate. However, we recognise that genuine claims and genuine customers may also trigger some of these risk indicators, which is why we ask genuine customers to contact us to verify their identify and their claim.”
What should I do if I get one of these Self Assessment letters?
Firstly, don’t assume that your tax agent or accountant has received a copy because not everyone’s has. Give them a call and they’ll talk you through their best advice before you get in touch with HMRC.
The ICAEW’s advice to their members is: “In conclusion, the faculty believes that agents should advise their clients that they are under no legal obligation to respond to the questions HMRC has raised. However, if they have nothing to hide, then they should feel comfortable cooperating with HMRC and completing the questionnaire or responding to its questions.”
Secondly, don’t panic. They’re not asking for any information that you don’t already have. You’re just going to have to assign a couple of hours to putting it all in the right place for HMRC and waiting in an inevitable phone queue.
Thirdly, don’t ignore it. HMRC don’t make idle threats. And there’s no point putting yourself at a disadvantage just through procrastination.
