Delay in tax refunds set to continue
Taxpayers waiting for tax refunds may face a long wait for their money back and it could be issued without any interest being added to it, accountants and business advisers PFK have warned.
Tax refund claims that are selected for manual security checks to ensure that they are not fraudulent are transferred to a new specialist unit in Bristol to investigate further without telling the taxpayer.
Confusingly, where a refund is due, messages given in HMRC’s online self-assessment pages often indicate that a repayment has been issued without making any reference to the checking system.
This special checking unit only accepts written communications so, once a case is referred, there is no way to speed up the process or find out why a refund has not been made.
“The refund system also contrasts drastically with the tax payments system where the rule is you pay first and HMRC ‘process’ your return automatically with checks made later,” said John Cassidy, Tax Investigations Partner at PKF.
“HMRC ought to adopt a similar process of ‘repay now - check later’ for taxpayers with a good tax compliance record. This would mean that the vast majority of refunds could be made quickly to help businesses and individuals in these tough times.”
