Where an individual is due a repayment of tax following the submission of their Self Assessment tax return, HM Revenue & Customs (HMRC) may undertake checks to ensure the claim is genuine. As part of these checks, HMRC may send the taxpayer a letter asking them to confirm their identity, which they must do by providing documentary evidence to prove who they are, and to answer some basic questions in relation to their repayment request. These letters are known as ‘SURF’ letters due to the HMRC reference used.
While HMRC do try to target SURF letters at those repayment claims that they believe to be fraudulent, they do acknowledge that some genuine claimants may receive the letters. It is, therefore, worth understanding what a SURF letter is and what action you should take if you receive one, as well as the consequences if you miss the deadline.
It is important to note that, should you receive a SURF letter, you are not legally obliged to respond, and that the letter is not a formal enquiry into your tax return. If you choose not to respond, however, HMRC will proceed on the basis that the claim is fraudulent, remove you from Self Assessment and cancel the repayment. This will cause delays and potentially additional costs in having your Self Assessment record reactivated and in the repayment being issued, so we would generally recommend that taxpayers reply within the relevant time limits. This is perhaps particularly important at the minute, as our experience is that repayments in general are being significantly delayed even where a SURF letter has not been issued.
If you have a tax agent, you should let them know if you receive a SURF letter, as HMRC may not have sent them a copy. Your agent can help you navigate this process and contact HMRC on your behalf.
Types of SURF letter
There are two different letters which HMRC can issue:
The first is known as ‘SURF1’, where HMRC will write to the individual letting them know that they believe their unique tax reference (UTR) may have been used to submit a potentially fraudulent repayment claim. If HMRC do not hear from the person, they will cancel the repayment claim and close down the Self Assessment record and UTR, to prevent them from being used to make further fraudulent claims.
Upon receiving one of these letters, the recipient, or their agent, must call the official Self Assessment helpline number provided on the letter within 30 days. If you need to make the call yourself, current HMRC phone waiting times are sitting on average at just under 15 minutes, so ensure you make enough time for the call.
The second letter, known as ‘SURF2’, is issued when a taxpayer has received a SURF1 letter and contacts HMRC as outlined above. In some situations where the taxpayer’s identity has been previously confirmed, HMRC may proceed directly to issuing a SURF2 letter – this is intended to reduce the overall time taken by the SURF process and speed up repayments to genuine taxpayers. Failure to respond to the letter within 30 days will again result in the repayment not being made and the individual being removed from Self Assessment.
The SURF2 letter asks the individual to provide documentary evidence of their identity, address, and certain information on employment. The types of evidence requested include copies of the individual’s passport, driving licence, utility bills, bank statements, council tax bills, and similar, with the full list of acceptable documents included in the letter (along with what to do if these documents are not available).
The letter requests for this information to be sent via post to HMRC, although as there are concerns about the security of the postal service – especially where so much sensitive personal information is requested, and so HMRC are exploring alternative methods. In the meantime, however, good quality copies (not originals) should be sent using an appropriately secure method of postage, such as special delivery. HMRC state that any copies sent to them will be securely destroyed after 50 days.
Form R38 (the income tax repayment form) and a repayment questionnaire are also included with the SURF2 letter, and must be completed and returned along with the requested documents to claim the repayment. Once HMRC have received the required information, the repayment should then progress through HMRC’s systems. As noted above, we are aware of general delays to repayments at the moment, so there may be a further delay in funds actually being released back to the taxpayer.
For any further queries regarding SURF letters, please speak to your usual Saffery Champness contact, or get in touch with Alison Hobbs.