Tens of 1000’s of Britons are lacking out on getting tax rebates as a result of they aren’t cashing cheques despatched to them by HMRC, The i Paper can reveal.
Every yr, hundreds of thousands of people that overpay earnings tax obtain a letter from HM Revenue & Customs (HMRC) telling them easy methods to request a rebate. These overpayments can occur for a number of causes, for instance if somebody modifications jobs half method by a yr or is mistakenly put on the fallacious tax code.
Historically, in the event that they didn’t reply inside 21 days, the taxman would subject a cheque to the handle on file for them, however yearly, tens of 1000’s of those cheques stay uncashed and so taxpayers miss out on getting cash owed to them.
HMRC has been making an attempt to cut back the variety of cheques it points for a number of years, however figures obtained by The i Paper by way of Freedom of Information request present it nonetheless issued 1,746,720 final yr, of which 178,180 have been by no means cashed.
These cheques had a mixed worth of £144m, which means taxpayers every lacking out on round £800.
The quantity issued was far greater, however since 2024, HMRC has been transitioning to a brand new course of whereby except prospects ask particularly for a cheque, it as a substitute tries different methods to contact them.
But it says round 20 per cent of taxpayers haven’t but been moved to the brand new system. It’s aiming to finish the swap by the top of the monetary yr, subsequent April.
Experts stated the figures highlighted how components of the tax system have been “still struggling to keep pace with a digital economy”.
Robert Salter, a companion at tax and accountancy agency Blick Rothenberg stated: “It is certainly a bit problematic that HMRC continues to use cheques to settle tax refunds in so many cases.”
But he additionally urged taxpayers to reply to HMRC correspondence.
“Until people do consistently open their HMRC correspondence, there is always going to be a problem and delays with the tax refund process,” he stated.
Shaun Moore, tax and monetary planning professional at wealth supervisor Quilter, added: “The information highlights how some components of the tax system are nonetheless struggling to maintain tempo with a digital financial system.
“Overpayments are widespread, typically attributable to individuals altering jobs, being put on the fallacious tax code, or having a number of sources of earnings in the course of the yr. Those points are unlikely to vanish, which makes the best way refunds are corrected and repaid much more essential.
“Where a repayment is required, it is encouraging that HMRC is issuing fewer cheques, as paper payments carry a higher risk of delay or going unclaimed. While there will always be limited cases where a cheque is unavoidable, a faster shift towards digital processes would reduce friction and help ensure overpaid tax reaches people more reliably and promptly.”
What to do if in case you have missed out cashing a HMRC cheque
If HMRC sends you a P800 letter – which it normally does from round June following the top of the tax yr in April – it can let you know to request a refund by way of a financial institution switch generally known as BACS. This will be carried out by logging into your authorities gateway account. If you don’t have one among these, you possibly can set one up utilizing the federal government web site.
If you may have an uncashed cheque from HMRC that was issued over six months in the past, you’ll not have the ability to money it.
HMRC says it may be changed on request. You can contact it on-line, or by telephone, on 0300 200 3300.
There’s technically no time restrict on doing this, however after 9 years, it turns into more durable for HMRC to confirm should you’re owed a refund, so it’s greatest to request a brand new cheque earlier than this date.
An HMRC spokesperson stated: “The overwhelming majority of pay as you earn (PAYE) repayments are issued by way of financial institution switch, which is now the default possibility, and the quickest and most safe method for patrons to obtain their cash.
“Customers can still request to receive their repayment via cheque and it’s their responsibility to cash it if they choose this method.”
Cashing a cheque is usually carried out in a financial institution department, though many banks will now permit prospects to take action digitally, utilizing a scanning service.
