A taxpayer's attempt to claim higher-rate pension tax relief through the HMRC app resulted in a technical loop that left their claim marked as "done" without any actual payment . Following the error, HM Revenue and Customs (HMRC) issued an apology and a £50 goodwill payment to the individual.
The £50 goodwill gesture for a "done" status
The incident began when a saver used the HMRC app to seek higher-rate pension tax relief, a process intended to help taxpayers reclaim the extra 20% they are owed. According to the report, the claim progressed through several stages—from "reecived" to "in progress" and finally to "done"—yet the user received neither the funds nor any communication regarding the outcome. When the individual finally contacted HMRC, they were informed that an error had occurred, and while the case was passed to a technical team, the status simply reverted to "done" without resolving the payment issue.
HMRC eventually apologized for the inconvenience and offered a £50 token to the saver. This error specifically involves the Relief At Source method, where individuals pay into a pension from after-tax income and the government adds the basic rate relief automatically. While basic rate taxpayers see a 20% top-up, higher-rate taxpayers must take additional steps to secure their full 40% entitlement.
The Self Assessment conflict in the HMRC app
A significant friction point emerged because the user was already registered for Self Assessment. As the report notes, HMRC expected the individual to claim the additional relief through their annual tax return rather than via the mobile app. However, the app failed to communicate this requirement to the user, leading to a technical stalemate where the claim was processed as "complete" in the system despite no money being moved.
For those not in the Self Assessment system, the process is typically more straightforward, involving an online or postal form that results in an adjusted tax code. The failure here was not just a software glitch, but a breakdown in user guidance that left a taxpayer stuck in a bureaucratic loop.
Steve Webb's warning of millions in lost relief
This individual's experience may not be an isolated incident, but rather a symptom of a much larger financial leak. Steve Webb, a prominent voice in pension advocacy, has suggested that savers may be missing out on hundreds of millions of pounds in unclaimed pension tax relief. This highlights a broader trend where the complexity of the UK tax system acts as a barrier to citizens accessing their rightful entitlements.
The stakes for taxpayers are high; for example, a person paying a net amount of £4,000 into a pension could be entitled to an extra £1,000 in tax relief if they successfully navigate the claim process. Without clear communication from HMRC, these significant sums remain sitting in the Treasury rather than in savers' retirement pots.
Why the HMRC app fails to notify Self Assessment users
The incident leaves several critical questions regarding the reliability of HMRC's digital infrastructure. It remains unclear whether the app's failure to redirect Self Assessment users is a known limitation or a recent technical regression . Furthermore, it is unknown how many other taxpayers have seen their claims marked as "done" without receiving their due relief.
While HMRC has advised that those in Self Assessment should use their tax returns to claim relief, the lack of automated prompts within the app suggests a disconnect between the agency's various digital platforms... Until HMRC addresses why the app permits these "dead-end" claims, savers may continue to face similar frustrations.
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