HM Revenue and Customs

5. Mr B complains that HMRC did not reply to his June 2024 letter. He complains it also did not give him the opportunity to submit a request for a tax refund for several years.

6. Mr B also complains that HMRC refunded some tax refunds to third parties that he had not authorised to receive them.

7. Mr B tells us that the failure to respond to his letter and loss of opportunity to submit tax refund request caused him frustration and distress.

8. He also tells us that he was affected financially when HMRC paid tax refunds to third parties and not directly to him.

9. Mr B would like an apology for the failure to respond and an opportunity to submit his refund requests.

10. Mr B would like HMRC to refund the payments to him that it made to the third parties. He would also like compensation for the costs he incurred having to use credit cards to cover the missing amounts and for the distress this caused.

11. Mr B tells us that some tax refunds for himself (and his wife) for the years 2016/17, 2019/20, 2020/21 and 2021/22 were wrongly sent to three different companies in August 2020, May 2023 and June 2023.

12. He complained to HMRC in December 2023 saying none of those payments had been authorised by his wife or him. HMRC responded in April 2024 and explained that it had processed the claims as they contained valid information including signatures. It explained to Mr B that if he disagreed with that decision he could bring his complaint to the Adjudicator’s Office (the AO) but should do so within six months of the date of the letter.

13. Mr B complained to the AO in July 2025, and the AO responded to say his complaint was outside its time limit and would not be investigated. Mr B then brought his complaint to our Office in August 2025.

HMRC did not respond and a missed opportunity

15. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the event(s) complained about had a negative effect which the organisation has not put right. Having done so we have found HMRC has already done enough to put right the impact of these events.

16. Mr B complains that HMRC did not respond to his June 2024 letter and this resulted in him being unable to seek a tax refund for the years 2019/20 to 2021/22. HMRC accepted it did not reply to that letter. It has now done so and given him the opportunity to submit refund requests for those years. It also paid him a financial remedy of £175 for the error and apologised.

17. Mr B wrote to HMRC in June 2024 to request the evidence that had been submitted by three third part companies that filed tax refund claims on his behalf. HMRC did not respond to this letter, and so Mr B was left with the belief that HMRC held evidence he needed to submit his own claims for tax refunds; evidence he had requested but did not have. He told us that this meant he could not submit the claims as he had no evidence to support them.

18. The HMRC Charter says:

When you get in touch with us, we will make sure that the people you deal with have the right level of expertise. We will answer your questions and resolve things first time, or as quickly as we can.

19. We contacted HMRC and it confirmed it had missed that letter and not responded to it. This is not in line with its Charter and is an indication of maladministration on the part of HMRC.

20. Mr B says HMRC’s poor communication caused him frustration and stress, and it stopped him submitting his tax refunds. We recognise that a lack of response from public bodies causes frustration for complainants. We also see there was a loss of opportunity to submit a tax refund request.

21. The PHSO Principles for remedy say that when maladministration has led to injustice, public bodies should try to offer a remedy that returns the complainant to the position they would have been in otherwise. If that is not possible, the remedy should compensate them appropriately.

22. We refer to our Guidance on Financial Remedy when looking at what the impact of the maladministration was and what level of remedy is proportionate to address it. Our severity of injustice scale explains that: A level two injustice will typically arise when what has gone wrong has had a relatively low impact on the person affected. This will often result in a degree of distress, inconvenience, or minor pain.

23. We would expect the person affected to recover quickly once the poor service had ceased. Level 2 injustice will not usually have a significant lasting impact, or any effect on the complainant’s ability to live a relatively normal life. A Level 2 remedy would typically be between £120 and £550.

24. HMRC has apologised to Mr B and paid him a financial remedy of £175 for the frustration he experienced. It has also provided him with a further opportunity to submit claims for the years 2019/20 to 2021/22. This is in line with its Financial Redress guidance.

25. We find this action puts right how the errors affected Mr B. We are also happy to hear he is pleased he can now submit the refund requests. The financial remedy offered, along with an apology and opportunity to resubmit is in line with our Guidance. We will therefore not take any further action on this part of the complaint.

HMRC issued tax refunds to third parties

26. Mr B complains that HMRC refunded some tax refunds to third parties that he had not authorised to receive them. HMRC says that it issued the refunds in line with the guidance in place at the time.

27. Company A submitted a transfer of marriage allowance form to HMRC requesting a transfer of some of Mr B’s Marriage Allowance to his wife. It requested any income tax rebate to be paid to it as their nominee.

28. Company B and Company C submitted tax refund claim forms (R40) to HMRC on behalf of Mr B, and each acted as his nominee to receive any tax rebate.

29. At the time these claims were processed, the HMRC PAYE Manual (91040) said:

‘A customer may nominate someone else to receive a repayment on his or her behalf by completing the appropriate authorisation on a return, claim form or repayment request form, in a letter, or telephone call […] ’

30. Both forms are HMRC template forms and they require the name, address, date of birth, signature, and National Insurance number for the claimant. They also ask for relevant contact details for the Company acting as nominee, including their address and their authorisation reference.

31. The forms need to be signed and dated by the taxpayer on whose behalf the claim is being made.

32. The details of each form were checked by HMRC against the tax records held for Mr B (and his wife). It told us all forms were signed and dated, and the addresses and national insurance numbers were correct. We verified this by reviewing copies of the forms.

33. The PAYE Manual sets out how HMRC staff should approach repayment claim forms. There is nothing within the Manual that indicates HMRC is required to, or should, verify the nomination documents it receives if an application provides the applicant’s signature. This means that HMRC is under no obligation to contact either party to verify or confirm if the information or signatures provided are correct.

34. Mr B said the signatures were clearly not his, but we are not able to comment on the validity or not of the signatures. This is a matter for the Police who we note Mr B has contacted.

35. As HMRC acted in line with applicable guidelines and standards at the time, we will take no further action.

36. We understand that this will be upsetting for Mr B to read, and we are sorry for the distress this will cause, particularly as he tells us that he has not signed the documents and is having to deal with the stress of being a victim of fraud.

37. We would like to reassure Mr B that this matter has been considered on a larger scale by HMRC. Although in this instance we are unable to find any indications of service failing by HMRC, it has been looking into cases like this in more detail to resolve concerns of this nature.

38. Since late 2022, HMRC has taken steps to investigate the matter of third-party companies contacting it to request repayments on behalf of their clients. This included conducting a public consultation on the use of repayment agents. Having done so, the Government has made some changes to the way HMRC may handle requests for repayment of tax.

39. In addition, we corresponded with HMRC to find out more about the changes to its guidance to help prevent any such cases occurring in the future. HMRC advised us that its guidance was updated in November 2024, specifically section 91040 of the Manual, referenced above.

40. HMRC went on to say staff were being made aware of these changes in the law and its own internal guidance had been amended to reflect this. HMRC explained that all details on the claim form, like an R40 form include the name, address, National Insurance Number (NINO), and date of birth and that these must match the information held on HMRC’s system. If they did not match, then they would be automatically rejected. If HMRC receives all the correct paperwork, it will not contact customers before issuing the payment.

41. In cases where the claim related to PPI, HMRC said it now asked for evidence of certain job expenses claimed via a letter or a P87 form. In addition, they explained that an individual is now able to withdraw a nomination in writing or over the phone up to the point HMRC issues the refund.

42. We are pleased to see these positive changes have been introduced and we hope this provides some comfort to Mr B.

43. HMRC has also introduced some changes in relation to ‘repayment agents’ and it now requires all repayment agents to register with HMRC. They must provide their Agent Reference Number (ARN) on the relevant form (e.g. the R40 form), and this will enable HMRC to check if the agent’s ARN is valid. If the ARN is deemed to be invalid, then HMRC will reject the nomination and repay the individual customer directly.

44. Further to the above, HMRC provided us with additional information about the changes that are applicable to its staff. We asked HMRC about this and it explained that its internal ‘Guidance Gateway’ tells staff how it should process nominations and Deeds of Assignments (DOAs). DOAs are legal documents assigning another person to collect a repayment.

45. This differs slightly to Mr B’s circumstances as the form provided to HMRC in his case was a nomination, not a DOA. As part of its submission to us, HMRC provided us with evidence of the Gateway Guidance, so we were able to verify for ourselves that these changes had been introduced.

46. Taking all the above into account we can see that HMRC has taken several steps to help improve and tighten its current procedures around repayment agents and nomination forms. We are satisfied that, taken as a whole, these steps demonstrate that HMRC has introduced proactive changes to help prevent such cases from occurring in the future. We hope Mr B is reassured to see the service changes that HMRC has implemented.

47. Based on the above, we will take no further action in respect of this. We found HMRC acted in line with its guidance in issuing the repayments to the Companies. While this will be disappointing to Mr B, we hope he is reassured to see the various changes HMRC has brought forward to tackle this issue going forward.

1. We have carefully considered Mr B’s complaint about HM Revenue and Customs (HMRC). We can see that he is unhappy with HMRC’s failure to respond to his letter of June 2024 and by how it handled his tax refunds. We are sorry to read these events have caused such frustration.

2. Having considered the evidence available to us, we can see that HMRC did not respond to his letter. It has now done so and given him an opportunity to submit refund requests. It also apologised and paid him £175 by way of a recognition if its failing. This is in line with applicable guidance and we will not take any further action on this part of his complaint.

3. Having considered the evidence and the standards and guidance that set out how HMRC should carry out its work, we have decided to take no further action on HMRC’s handling of the tax refunds paid to nominees. This is because HMRC acted in line with its guidance in how it handled those refund requests.

4. We appreciate Mr B feels strongly about the complaint, and our statement below sets out the reasons for our decision.