Thousands of taxpayers to miss out on rebate as HMRC still sending cheques
Thousands of Brits are missing out on collecting their tax rebates after failing to cash in cheques sent to them by HMRC.
According to an FOI from the i paper, the department issued 1,746,720 cheques last year, but 178,180 were never cashed.
The cheques had a combined value of £144m, meaning taxpayers who failed to cash in their money missed out on roughly £800 each.
Millions of Brits overpay income tax each year, with the HMRC chasing them down and sending a letter informing them how to request a rebate.
If a response is not given within 21 days, a cheque is issued by the taxman to the address on file, with overpayments occurring for a number of reasons, including changing jobs during the year, having multiple sources of income or being mistakenly placed in the wrong tax code.
Stopping the issuing of cheques
The department has been attempting to stem the number of cheques it issues for several years, in a bid to reduce overall costs and accelerate the payment process for taxpayers, ultimately helping streamline HMRC operations.
Paper cheques are also considered high-risk, as they become lost or stolen while in transit, with missing cheques causing a bureaucratic headache for both the taxpayer and HMRC.
This has led to a smaller issuing of cheques, after HMRC transitioned to a new process in 2024, with the department trying to contact them in new ways if a cheque is not specifically requested.
But it says roughly 20 per cent are yet to be moved to the new system, and it aims to complete the switch by the start of the next tax year in April 2027.
Industry figures have urged a faster shift towards a digital process in order to reduce errors and ensure overpaid tax reaches Brits swiftly and reinforce that the department is reliable.