HMRC issuing £70 refunds to 1.3m Brits with 'real scam risk' alert debunked
If it's too good to be true, it usually is, but in this case, HMRC actually are about to give out refund payments to millions of Brits.
The refunds are due to an error in how tax is deducted from a certain type of pension, and 1.32 million Brits can expect a letter through the door in the coming months informing them they'll be getting a £70 'low earner's pension payment.'
Understandably, letters promising unexpected money can be treated suspiciously and former pensions minister, Sir Steve Webb, is worried people won't claim the refund as they'll presume it's a scam.
But HMRC have promised they'll be raising awareness about the refunds and have shared tips on how to ensure any letter you get is genuine.
What is the 'low earner's pension payment'?
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When an employee pays into their pension, they get tax relief on their contributions. Meaning the funds that would go on income tax go towards the future instead.
However, some workers whose employees utilised a Net Pay Arrangement pension scheme, which takes payments from gross earnings before tax, would have got less tax relief than those on a Relief at Source pension, in which contributions are deducted from earnings after income tax and National Insurance are paid.
The government announced earlier this year they would make up the difference to those who missed out.
However, it typically only applies to workers who earned close to, but not more than, the income tax threshold of £12,570 a year.
The refund is expected to work out at about £70, though that could vary. Letters are already being sent out and will continue to be until early next year.
HMRC say they expect women to make up 75 per cent of those eligible, which is about 990,000 of the 1.32 million.
It only applies to the 2024-25 tax year at the moment, but may become an annual payment for those in the situation in years to come.
How to check the HMRC letter is not a scam
Webb is concerned the process of issuing the payments could be challenging and is expecting many to ignore the letters or digital notifications through online HMRC accounts.
"The process of getting these payments to the right people is going to be incredibly painful and there is a real risk of huge non take-up," he said.
"It is vital that communications are effective to make sure that people get the money to which they are entitled."
However, HMRC have given clear instructions on how people can ensure any letters are the real deal instead of a scam.
It's advised that customers do not need to apply, as they will be notified if eligible. It's also made clear that HMRC will never text, email or call, so any such communications claiming to be the tax authority should be ignored.
HMRC will also never ask for money transfers, pins or passwords.
To ensure a letter is genuine, you can make sure your details are up-to-date and the government website has a 'check if a letter you've received from HMRC is genuine' service.
A HMRC spokesperson said: "We know some people may be cautious about unexpected contact, which is why we provide clear information about what to expect and how to verify the contact is genuine.
"Customers can check a letter is genuine on GOV.UK and should only respond via official HMRC channels. We’ll never ask for passwords, PINs or money to be transferred to claim a payment."
Daniel Murphy