The pandemic has prompted fraudsters to cash in on the Government business support schemes, often using ID details of genuine businesses to access grants or loans. Once the ID has been proven to work, the fraudsters try to increase their take by submitting false tax refund claims.
HMRC are now writing to taxpayers who have claimed a recent tax refund that is not typical for that taxpayer. You should get a copy of the HMRC letter as the tax agent, but this isn’t always happening.
There are two versions of the HMRC letter.
In the first letter HMRC are concerned that the taxpayer’s UTR has been used to submit a self-assessment tax return that claims a tax refund. Many businesses are submitting tax refund claims for the first time as they have made losses during the pandemic.
The taxpayer is asked to call HMRC within 30 days on: 0300 200 3310, and confirm their ID, quoting their UTR number. It appears the taxpayer must make this call themselves, the tax agent can’t call on their behalf.
Following this call the taxpayer may receive the second letter, which requires a written response including copies of three forms of ID to prove their name and address. This second letter may also be used as the initial letter to the taxpayer in serious cases.
The taxpayer is asked 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. To obtain the tax repayment the taxpayer is asked to repeat all the details in the first claim by completing a R38 tax refund form.
If the taxpayer does not respond to either letter, they will not receive the tax refund and their self-assessment account will be closed. They may also be blocked from claiming any further SEISS grants.
Written by the Tax Advice Network