Tax Refund

HMRC's new system will mean that refunds are made to the account of the debit or credit card used to make a payment. According to personal tax partner, Nimesh Shah, this could lead to all kinds of problems.

"HMRC have introduced a new procedure to pay refunds to the debit or credit card the person used to pay their tax," Shah explained. "This process will override the bank account details the person includes on their Self-assessment tax return."

The reason for the new process is to ensure that HMRC are following payment card industry guidelines, according to the tax collection agency itself.

These rules state that any refunds due to be paid back should only be made to the card used in the original payment transaction. Closed or expired

Shah pointed out some potential problems: "HMRC will make the refund to the card last used to pay a tax liability. If the payment was made from an account which has been closed, or the card expired, the repayment will be rejected by the bank and HMRC will have to contact the person to arrange for the repayment to a different account."

"I am extremely concerned by this new procedure and the lack of publicity by HMRC," he added.