HMRC has come under fire for allegedly enabling fraud by funding false tax refund applications that third-party agents filed on behalf of unsuspecting individuals.

If they believe they have paid too much tax, they can seek for a refund. They have the option to choose an agent to do this on their behalf, however some companies are gathering personal information in order to submit false claims.

Since 2020, tax relief scams involving unscrupulous claims organizations have cost the Treasury billions of pounds, and insufficient checks mean that innocent taxpayers may receive unexpected bills should claims made in their name turn out to be fraudulent. Whether or not a person received the rebate from an agent, HMRC is entitled to recoup invalid payments from them.

Former police officer and private investigator Jim Mackie claims HMRC declined to look into the use of his wife's information by a tax refund company to file a fictitious £5,000 rebate claim in her name last year. HMRC paid the full amount to Waltonbridge, a company situated in Lancashire, claiming to be Mackie's wife's designated agent.

“The first we knew about it was when HMRC wrote and said that rebate cheques were being sent to the ‘agent’,” said Mackie. “The claim, sent in my wife’s name with a signature that was not hers, was for tax paid on interest received from PPI payments. She hasn’t claimed a PPI payment since 2012 and for that amount of tax to be due she’d have had to have received a fantastical £100,000.”

Waltonbridge passed on just over the half the money in the form of a cheque, deducting a 48% fee, but the Mackies do not intend to cash it. Instead they have reported the suspected fraud to HMRC which told them it was satisfied the claim was genuine.

“It relied solely on Waltonbridge’s word,” Mackie said. “These scammers are stealing hundreds of thousands of pounds a year from HMRC and HMRC is happy to sit back, let it happen, then blame us, the public, for making false complaints.”

Mackie was advised by HMRC to report the alleged fraud to the police who, he said, were unable to investigate since it was HMRC, not his wife, who had lost out financially. He said Trading Standards also declined to take on the case and he has now lodged a complaint with the Parliamentary Ombudsman.

Anthea Jones is among dozens of others who report being targeted by Waltonbridge, a four-year-old company operating from a hot desk in Bury. She was informed by HMRC that a payment of £1,036 for tax deducted from savings and investments had been sent to her appointed agent. She said she had made no such claim and had never heard of Waltonbridge.

“At my request HMRC sent me a copy of the claims form in my name and the signature was not mine,” she said. “HMRC insisted the signature was genuine and that it could not get involved in disputes between an individual and an agent.”

Tax claims agents are unregulated and the campaign body the Low Incomes Tax Reform Group (LITRG) says that unscrupulous firms may be obtaining taxpayer’s personal information, including signatures, from PPI claims management firms and recycling it to submit new claims without the individual’s’s knowledge.