Tax Refund Scam Warning After Nurse Repays HMRC

An NHS nurse has been left repaying four years of tax refunds after handing her HMRC login to a colleague who filed inflated expense claims in her name. A First-tier Tribunal decision published in June 2026 cancelled her penalties but not the debt, and it stands as a stark tax refund scam warning to any PAYE worker offered an easy, oversized rebate.

The essentials of the case:

• The colleague submitted Self Assessment returns across four tax years, from 2019 to 2020 through to 2022 to 2023, keeping 20% of each repayment as a “fee”.
• To grant access, the nurse shared her National Insurance number, date of birth, Government Gateway ID and password, and her multi-factor authentication code.
• HMRC later ruled the travel claims invalid, recovered the tax through discovery assessments, and the nurse repaid the full amount — including the fifth kept by the colleague.
• Nurses can claim a genuine £125 a year flat-rate allowance for laundering their uniform, one of several legitimate reliefs available directly from HMRC.

How the tax refund scam worked

Around 2020, the nurse — anonymised as “A Nurse” in the published decision — made a legitimate claim through a third-party company for the fixed-rate uniform allowance that NHS staff can receive.

The following year, a colleague offered to help her claim travel expenses between home and work as well.

Rather than simply complete a claim for her, the colleague asked for her login details and security information, then accessed her HMRC account directly.

Over four tax years they filed Self Assessment returns that generated repayments, retaining a fifth of each one. The tribunal accepted that the nurse was honest and had neither prepared nor seen the returns submitted in her name.

HMRC opened an enquiry, found the travel claims were not due, and raised discovery assessments to recover the tax. It also issued penalties for careless conduct.

Why the nurse was still left with the bill

The tribunal accepted she had been manipulated by someone she trusted, but agreed with HMRC that handing over her Government Gateway credentials was a failure to take reasonable care: she had allowed returns to be filed in her name with no chance to check them. That carelessness justified penalties in principle.

The judge then applied a special reduction so substantial that it effectively wiped the penalties out, recognising she had been exploited and had personally gained nothing from the arrangement.

Even so, the tax itself remained repayable. In a pointed aside, the judge said HMRC was “somewhat to blame” for operating a repayment system that authorised the claims when, in the tribunal’s words, “even a cursory review ought to have raised alarm bells”.

The reason that matters for everyone else is simple. HMRC holds the named taxpayer responsible for a return, even when a third party prepares and submits it — and it is the named taxpayer who repays any refund that should not have been paid, including whatever the fraudster kept.

The travel rule that catches people out

Many bogus claims rely on workers not knowing one rule. Under the Income Tax (Earnings and Pensions) Act 2003, employees may deduct the cost of travelling to a temporary workplace, but ordinary commuting — the journey between home and a permanent workplace — does not qualify.

Section 336 sets the general test for employment expenses, while sections 337 and 338 govern travel. A daily commute dressed up as work travel is one of the most common reasons these repayments are later withdrawn.

The nurse’s case is not isolated. It echoes the earlier Apostle Accounting affair, in which a Stowmarket firm submitted large numbers of rebate claims for mainly PAYE clients; hundreds later received repayment demands when HMRC revisited the claims.

Since 14 October 2024, HMRC has required supporting evidence for most standalone P87 employment expense claims, part of a wider push to stop ineligible refunds before they are paid rather than chasing them afterwards.

If you work for the NHS or in any PAYE role, here is how to stay safe and still claim what you are genuinely owed.

How to protect yourself and claim safely

The single most important rule: never share your Government Gateway ID, password or security codes with anyone — not a colleague, not a friend, and not a refund firm. Anyone holding those details can file in your name, and you carry the consequences.

Red flags to watch for

1. Unsolicited offers to “get you a bigger refund”, especially from someone who takes a percentage of the payout.
2. Pressure to hand over your login or security codes so someone can claim “on your behalf”.
3. Claims you do not understand or cannot see, and promises of unusually large rebates.
4. Treating a refund landing in your account as proof it was valid. Under HMRC’s “process now, check later” approach, money can be paid first and reclaimed later, potentially with interest.

There are real reliefs you can claim yourself, free, in minutes. NHS staff may claim the £125 a year uniform-laundering allowance, tax relief on the registration fees they pay to bodies such as the NMC or HCPC, and relief for genuine travel to temporary workplaces.

You can do this directly through GOV.UK or the HMRC app, or with free, accurate guidance from a reputable source such as Tax Rebate Services — including its guide to employment expenses tax relief for employees in the health industry — without giving anyone else control of your account.

You can also check what you are entitled to on the GOV.UK tax relief for employees pages.

If you think you’ve been caught by this

1. Contact HMRC directly to explain what happened and check your Self Assessment history for returns you did not file.
2. Change your Government Gateway password and review who has had access to your account.
3. Report the person or firm that made the claims.
4. Keep a record of everything you find, including dates and amounts.

The tribunal’s compassion in this case should not be read as a safety net. The nurse escaped a penalty because she was found to be a genuine victim, but she still had to repay the tax — and in many cases the bill would stand.

Key Takeaways

• An NHS nurse repaid four years of tax refunds after a colleague filed inflated claims using her HMRC login.
• The tribunal cancelled her penalties as a manipulated victim, but the tax remained repayable — including the 20% the colleague kept.
• You are responsible for any return filed in your name, so never share your Government Gateway login or security codes.
• Ordinary commuting from home to a permanent workplace is not claimable; only genuine temporary-workplace travel may qualify.
• A refund arriving does not confirm it was valid — HMRC can review and reclaim it later, sometimes with interest.
• Genuine reliefs such as the £125 uniform allowance and professional fees can be claimed free, directly through GOV.UK or the HMRC app.