HMRC is reportedly delaying the payment of self-assessment tax refunds and “threatening” to remove individuals from the self-assessment regime if extensive information is not provided, according to accountants Hillier Hopkins.
The accountants claimed that it has seen an increase in letters from HMRC to clients demanding extensive documents and information that it calls “security procedures” to make sure the “repayment amount claimed is correct”.
Debbie Wilson, director and head of trusts and estates at Hillier Hopkins, said: “Individuals face removal from the self-assessment regime and delays on receiving grants under the Self-Employment Income Support Scheme.
“Whilst we totally understand HMRC’s need to prevent fraudulent reclaims, individuals expecting a tax refund are being hit with the suggestion that their tax affairs are questionable and deliberately wrong.”
Individuals are asked to complete form R38 that requires extensive information, together with proof of identity and address. However, HMRC has dismissed these letters as “nothing more than a simple identity check”.
Wilson added: “HMRC has confirmed that these letters are triggered when unspecified risk indicators suggest that the customer or claim may not be legitimate. HMRC also recognises that these letters will arrive on doorsteps of individuals making entirely legitimate claims. They appear indiscriminate questioning tax refunds.