HMRC refunds as 178,000 UK taxpayers fail to claim £800 | Personal Finance | Finance

A total 178,000 taxpayers are missing out on rebates worth around £800 each.

An eye-watering 178,000 UK households are failing to receive tax rebates due to uncashed cheques dispatched by HMRC.

The i Paper has reported that people who have overpaid tax are being sent cheques which they fail to cash. Figures disclosed by the paper on Sunday (April 12) reveal the Labour government’s tax authority still issued 1,746,720 cheques last year, of which 178,180 were never cashed , reports Birmingham Live.

These cheques carried a combined value of £144 million, meaning each taxpayer is missing out on approximately £800.

Robert Salter, a partner at tax and accountancy firm Blick Rothenberg said: “It is certainly a bit problematic that HMRC continues to use cheques to settle tax refunds in so many cases.”

Shaun Moore, tax and financial planning expert at wealth manager Quilter, added: “The data highlights how some parts of the tax system are still struggling to keep pace with a digital economy.

“Overpayments are common, often caused by people changing jobs, being put on the wrong tax code, or having multiple sources of income during the year.”

“Those issues are unlikely to disappear, which makes the way refunds are corrected and repaid even more important.

“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.”

An HMRC spokesperson said: “The vast majority of pay as you earn (PAYE) repayments are issued via bank transfer, which is now the default option, and the quickest and most secure way for customers to receive their money.

“Customers can still request to receive their repayment via cheque and it’s their responsibility to cash it if they choose this method.”