Greater than 170,000 miss out on £800 HMRC tax rebate as a consequence of ‘problematic’ system

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Your help makes all of the distinction. Learn extra Lots of of 1000's of taxpayers are lacking out on HMRC refunds price a median of £800, new statistics present.

Tens of millions of individuals overpay tax yearly for a lot of causes, that means they're owed a rebate from HMRC to reunite them with their cash. The tax authority sends letters out yearly to those folks, instructing them learn how to make a request.

Till 2024, recipients had 21 days to reply, or else they had been issued a cheque to the tackle on file for them. However tons of of 1000's of those are nonetheless going uncashed.

Final yr, HMRC issued 1.7 million cheques to these owed rebates, of which 178,180 had been by no means cashed, figures obtained by The i reveal. The mixed worth of those rebates was £144m, that means every particular person missed out on a median of £800.

Final yr, HMRC issued 1.7 million cheques to these owed rebates (Getty/iStock) HMRC has been working to cut back the variety of cheques it points in recent times, with the determine dropping from 4.1 million within the 2023-2024 tax yr. The tax authority began shifting to a brand new system in 2024, the place it makes an attempt to contact clients in different methods until they ask for a cheque themselves.

Robert Salter, a companion at tax and accountancy agency Blick Rothenberg, mentioned: “It's definitely a bit problematic that HMRC continues to make use of cheques to settle tax refunds in so many circumstances.”

What are the most typical causes for overpaying tax? You is perhaps owed a rebate should you: got the mistaken tax code by HMRC or by your employer completed one job, began one other, and had been paid by each in the identical month began to obtain your pension earlier than retiring acquired employment and help allowance or jobseeker’s allowance He added: “Till folks do persistently open their HMRC correspondence, there may be all the time going to be an issue and delays with the tax refund course of.”

Most individuals will obtain a P800 letter telling them that they're owed a tax rebate round June, following the top of the tax yr in April. This instructs the recipient to request the fee through a financial institution switch known as BACS. That is executed by logging into their authorities gateway account, which could be opened at any time.

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Those that have an uncashed cheque from HMRC can now not money it after six months, however this doesn't imply it has turn into void. A substitute could be issued on request, and there may be technically no time restrict to money it. Nonetheless, it could turn into tougher for the tax authority to confirm the rebate after 9 years.

An HMRC spokesperson mentioned: “The overwhelming majority of PAYE repayments are issued through financial institution switch, which is now the default possibility, and the quickest and most safe means for patrons to obtain their cash.

“Prospects can nonetheless request to obtain their reimbursement through cheque and it’s their accountability to money it in the event that they select this methodology.”