HMRC delaying tax repayments due to security checks

HMRC has introduced additional security checks before releasing tax repayments under Self-Assessment where it is concerned that a repayment claim on the client’s return was not genuine. HMRC is corresponding direct with taxpayers because of its concerns about potential fraud, and copies of the letters are not sent to advisers.

The letters contain a request for three forms of ID documents (from the usual Anti-money laundering lists), together with copies of a bank statement (for the account stated on the return), various documents to support CIS and employment details, where appropriate, a Repayment Questionnaire and a Form R38 refund claim. HMRC also states that it will carry out additional checks where a grant has been claimed under the Self Employed Income Support Scheme. The letters are not enquiries under section 9A, Taxes Management Act 1970, but a check under section 9, Commissioners for Revenue and Customs Act 2005.

Further information about these letters can be found from the CIOT and ICAEW (including example letter text).

A response within 30 days is required (or an explanation as to why more time is required), in the absence of which HMRC states that it will remove the taxpayer from Self-Assessment.

There is no obligation in law to respond to the letter, but advisers should notify any clients who receive such a request that the requested information and documents should be sent to HMRC as soon as possible, to avoid any delays in receiving repayments, and also to avoid inconvenience and costs in restoring Self-Assessment status.

There is currently no facility to reply electronically to these letters, so replies should be sent by registered post. We understand that future letters will show an HMRC department name of ‘ITSA ASCV’ to help ensure that responses from taxpayers and agents are at less risk from interception of mail.

As always, before sharing any confidential information, care should be taken to verify that any communication purporting to come from HMRC is genuine, as scam ‘HMRC messages’ continue to be sent by fraudsters. Any taxpayers who are concerned about the letter’s authenticity can contact HMRC to confirm that the letter was issued by HMRC. Agents can call the agent helpline.

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