A freelance film producer whose £2,765 VAT rebate was paid into a bank account he closed 16 years ago has described his battle to get hold of his money after the account number was recycled by Barclays and the new holder did not return the cash.
Chris McBride, who lives in Penzance, has been trying to get his hands on his money since May but HMRC and Barclays insist it is the other side’s problem to sort out.
McBride says Barclays staff were combative when he complained, informing him that it was allowed to recycle bank account numbers and he would have known this “had he read the terms and conditions”.
HMRC appears not to have matched the name of the account to the recipient of the refund
It has emerged that in 2008 Barclays gave a new customer the same account number and sort code as the one the producer closed in 2006. Having written to the account’s new owner – who failed to respond – the bank closed the complaint.
For its part, HMRC appears not to have matched the name of the account to the recipient of the refund, a check that would have halted the erroneous transfer. In 2020 HMRC assured Guardian Money that it was taking steps to stop this kind of thing happening.
The case raises the question as to why banks are reusing account and sort code numbers.
“The whole case is ridiculous, and I’m now at a loss as to how to get my money back,” McBride says. “Back in 2004 my accountant put me on the fixed-rate VAT scheme, and two years later I switched my bank account from Barclays to First Direct. I have made countless payments to HMRC from my First Direct account since.”
However, when Covid closed the film industry, McBride was told that for the first time in 16 years he was due a VAT rebate.
He assumed it would be paid in the same way as a tax rebate. When he realised he had not received the £2,765 his accountant chased it up. It emerged that HMRC held his old details on its VAT system and had paid the money in several instalments into his closed account.
View image in fullscreenChris McBride says Barclays told him he would have known it could recycle bank account numbers ‘had he read the terms and conditions’. Photograph: Newscast Online Limited/Alamy
“Since then I have spent hours on the phone,” he says. “A person at HMRC told me she would write to Barclays to ask it to contact the new account holder. That was the last bit of good news I had.
“When the new account holder failed to respond, Barclays simply shut down the case. Its stance is that this is all my fault for not telling HMRC. I’d assumed that a closed account was just that – closed – but apparently not.”
After a spate of these cases some banks, including Nationwide, changed their terms and conditions to allow staff to take back payments that land in the wrong account. Had Barclays done the same it could have retrieved McBride’s money.
The case is similar to that of Peter Teich, who had lost a £193,000 inheritance after it was mistakenly paid into another Barclays account with a near identical account number to his own. He pursued a costly legal fight to retrieve his money.
The person receiving the money can take it with no fear of prosecution because the bank is protecting their identityChris McBride
Barclays said it had followed McBride’s instructions by closing his account in August 2006. “Barclays received funds between 2019 and 2022 sent by HMRC that were applied to the instructed account using the sort code and account number as the unique identifier,” a spokesperson says.
“As soon as we were alerted that the funds were not sent to the intended account we acted to recover the funds but this action was not successful. We have advised our customer that there has been no bank error and the matter should be referred to HMRC.”
HMRC says it had made the payments into the bank account it held for McBride. However, it adds: “In a bid to help the customer, we have made a request to Barclays for the payments to be returned.”
This leaves McBride at an impasse. He could pursue the matter through the courts but the costs involved are likely to be prohibitive. He adds: “What’s galling is the fact that the person receiving the money can just take it with no fear of prosecution because the bank is protecting their identity.”
