One million people set to receive £50 payment from HMRC – here’s how to not miss out

Letters sent by HMRC entitling UK residents with tax relief payment

The government department charged with tax collection and financial state support is writing to low income individuals who have missed out on the opportunity. 

A person may be automatically enrolled into a workplace pension despite earning less than the personal allowance, meaning they wouldn’t be eligible for tax relief on pension contributions.

This is because many workplace pensions deduct contributions from employee salaries, so that they pay less tax after receiving their pay slips. 

This is called Net Pay Arrangement, and affects people earning £10,000 to £12,570 yearly.

Former pensions minister Steve Webb also warns of risks of misidentification from the receivers, thinking that the letters are elaborate scams rather than official government grants. 

"The process of getting these payments to the right people is going to be incredibly painful, and there is a real risk of huge non-take-up," he said.

"Most people will not have a clue about this issue and may be suspicious of a letter out of the blue from HMRC offering them free money. 

“Some may suspect it is a scam. It is vital that communications are effective to make sure that people get the money to which they are entitled."

75% of those who have missed out on the tax relief payment are thought be women.

The campaign to inform entitled residents begins this month and is expected to run until the following year.

If you earn between £10,000 and £12,570 per year and your employer uses Net Pay Arrangements, you could miss out on tax relief contributions.

"Customers don't need to apply or contact us, we'll send them information about how to receive their payment via post,” said an HMRC spokesperson. 

"We know some people may be cautious about unexpected contact, which is why we provide clear information about what to expect and how to verify the contact is genuine.

"Customers can check a letter is genuine on GOV.UK and should only respond via official HMRC channels. 

“We'll never ask for passwords, PINs or money to be transferred to claim a payment."

If this speaks to you or someone you know who is eligible for tax relief compensation, make sure you inform yourself if your employer is using a Net Pay Arrangement.

Keep an eye out for the postman, as you could easily check in some extra money each month.