Due to increased activity by fraudsters during the pandemic as they attempt to illegally access Covid-19 grants and loans, HMRC has decided to be more wary when submitting tax (including VAT) payments to taxpayers.

Accordingly, HMRC is now writing to taxpayers who have claimed a recent tax refund that is not typical for that taxpayer. A copy of any letter sent to you about this should be sent to your tax advisor also, but this does not always happen.

There are two versions of the HMRC letter.

In the first letter the taxpayer is asked to call HMRC within 30 days on: 0300 200 3310, and confirm their identity, quoting their UTR number. It appears the taxpayer must make this call themselves, your tax advisor cannot make the call on your behalf.

Following this call a second letter may be received, which requires a written response including copies of three forms of identity to prove name and address. This second letter may also be used as the initial letter to the taxpayer in serious cases.

You also have to fill in a ‘repayment questionnaire’ that asks about the process they took to submit the tax return – who did it, what was the fee, and where the repayment was authorised to be paid. In addition you have to  repeat all the details in the first claim by completing a R38 tax refund form.

A failure to respond will mean that any tax repayment will not be issued. In addition their self assessment account will be closed. If it is a genuine account then you will have to re-register with HMRC. Lastly, you may also be blocked from claiming any further SEISS grants.

HMRC is keen to emphasise that these letters are not an enquiry into your tax affairs but are issued under other legislative powers that enables them to check identities of taxpayers.

Please contact us if you receive any such letters from HMRC. There is a fine line between scam letters and the real things so it’s always best to check with us first to see if it is valid so you can get the tax repayment you are due.