Nominations of tax repayments remain valid

As of Budget Day, assignments of income tax repayments are void. However, HMRC will still consider requests for repayments to third parties.

The government stated that assignments of income tax repayments will be void in response to Raising standards in tax advice: protecting clients seeking tax repayments.

When signed, the measure is applicable to assignments of income tax repayments that HMRC receives on or after 15 March 2023.

The Law of Property Act of 1925 governs assignments. They formally transfer certain debts to another party, and they can only be revoked with both parties’ consent. High volume repayment agents used them (and occasionally abused them).

This change has no bearing on the more common nominations of specific tax repayments, such as those on a P87 claim for employment expenses or a self-assessment tax return. Nominations are still being accepted by HMRC.

For the time being, HMRC will consider nominations made on or after March 15, 2023, as non-legally binding assignments.