UK households receiving official letters from HMRC could be due a refund of nearly £1,000 after overpaying income tax — but are being urged to remain vigilant as fraudsters target unsuspecting taxpayers amid the rush.
According to data obtained via a Freedom of Information request, HMRC repaid over £8.3 billion in overpaid income tax during the 2022/23 financial year. The average refund issued was £943.
Millions Receiving Repayments Amid Overpaid Tax Surge
Millions of UK taxpayers are now receiving physical letters from HMRC informing them they may be eligible for a tax refund due to overpaid income tax. These letters, arriving in the department’s characteristic brown envelopes, follow routine end-of-year reviews by the tax authority and are mostly triggered when workers are placed on incorrect tax codes. This situation can often arise when a person changes jobs mid-year, has multiple sources of income, or fails to update HMRC with new employment information.
According to The Sun, which obtained the data through a Freedom of Information request, over £8.3 billion in overpaid tax was returned to individuals during the 2022/23 tax year. On average, eligible recipients received £943 each, offering a financial boost amid persistent cost-of-living pressures. Over 2.3 million self-assessment customers also received individual rebates during that period.
Taxpayers are encouraged to file their Self Assessment tax return online from 6 April, following the end of the tax year. Anyone submitting a return for the first time or resuming after a break must register with HMRC to access the service. Users will need their Unique Taxpayer Reference (UTR) number and, in most cases, will be asked to verify their identity with official photo identification.
Fraud Concerns Prompt Official Warning From HMRC
While the refunds represent a legitimate opportunity for many households to recover overpaid tax, HMRC has issued a strong warning about a concurrent increase in fraudulent activity. Scammers are reportedly capitalising on the volume of letters being sent by impersonating the authority through phishing emails, texts, and calls, often claiming to offer or request details about a tax refund.
HMRC has stressed that it never asks for personal or financial information via unsolicited communication methods. Genuine refund offers will not require recipients to click on links, provide bank details, or make payments to release funds. Refunds are typically issued via bank transfer or cheque, depending on how the original overpayment was made.
The department advises anyone unsure about the authenticity of a communication to verify its contents directly through the official GOV.UK website or by contacting HMRC‘s support services. Suspicious messages can also be reported to the department’s dedicated phishing team for investigation.
