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Daily Mirror
27-05-2025
- Business
- Daily Mirror
HMRC warning issued as Brits waiting months for payouts which used to take weeks
In response to a request submitted in March, HMRC said that it would reply in August. In the message, the department said it was "currently processing requests received on 10 December 2024" A warning has been issued as HMRC is taking up to four months to process tax refunds, compared to only a few weeks previously. The issue was first flagged by York-based accountancy firm Equilibrium Accountants earlier this month. The firm's managing director Nikki Ainscough reported that some of her clients had been advised to wait more than four months for refunds of overpaid tax or national insurance. Processes which previously only took between four and six weeks. In response to a request submitted in March, HMRC said that it would reply in August. In the message, the department said it was "currently processing requests received on 10 December 2024". She told the Guardian: "I've never experienced this … Why has it jumped so significantly?' 'If the backlog is that big, it suggests a high volume of claims and a potentially substantial sum of money that is owing to small businesses and individuals at a time when cashflows are critical.' According to reports, the worst delays appear to be affecting refunds for employers' PAYE bills and the Construction Industry Scheme (CIS). The CIS is a scheme that applies if you work for a contractor in construction on a self-employed basis. If you fall under this scheme, the contractor must withhold tax on its payment to you. This means you could end up overpaying if you're on a low income or claim tax relief on trade expenses. It is understood that some of the staff working on PAYE and CIS refunds have been taking part in industrial action. HMRC has not provided a figure on how many people may have been affected by the delays, but confirmed that self-assessment refunds had not been affected. The tax department has not yet provided an official update on the issues since they first came to light. On the delays, a HMRC spokesperson said: "We're tackling response times for these refund claims by allocating extra staff to work on them. We've made significant improvements to our customer service overall. Customer satisfaction stands at around 80% and the funding settlement we've received means we'll be able to meet our service standards in 2025-26." Join Money Saving Club's specialist topics For all you savvy savers and bargain hunters out there, there's a golden opportunity to stretch your pounds further. The Money Saving Club newsletter, a favourite among thousands who thrive on catching the best deals, is stepping up its game. Simply follow the link and select one or more of the following topics to get all the latest deals and advice on: Travel; Property; Pets, family and home; Personal finance; Shopping and discounts; Utilities. If you pay more tax than you need to, then you will receive a tax repayment from HMRC. The main reason overpayments was due to people being on the wrong tax code. This can happen in a variety of ways, including starting a new job, receiving a redundancy payment, and only working for part of the tax year. In the majority of cases, HMRC calculates overpaid tax automatically and sends a P800 form to explain how to claim that money back. These are sent out at the end of the tax year, usually in the summer months. If this hasn't happened and you think you're owed a refund, you can apply for a tax refund online through the HMRC website. You'll be asked what you paid too much tax on, before being taken through a series of questions to find out a bit more about your circumstances. If you've requested a tax refund already, you can use HMRC's "Where's My Reply" tool to find out how long you can expect to wait. You'll need to provide some information about your request, including how and when you submitted it. The tool gives you a date for when you can expect a reply. It also tells you when the claims that are currently being processed were submitted. Some refund requests may require additional checks, which can take up to 12 weeks.
Daily Mirror
06-05-2025
- Business
- Daily Mirror
HMRC backlog causes unprecedented delays in tax refunds for UK businesses and individuals
HM Revenue and Customs has blamed the delays on a 'backlog' that has built up at the tax office, with some individuals and small businesses reporting waits of more than four months for refunds HM Revenue and Customs is receiving criticism for making individuals and small businesses wait over four months for tax refunds – a process that accountants recall used to take mere weeks. The backlog is causing a stir among professionals, especially amidst escalating dissatisfaction with HMRC's service levels, which have drawn flak from MPs and raised alarms for Britain's beleaguered small enterprises. Particularly affected are employers' PAYE and the Construction Industry Scheme (CIS), both of which involve businesses seeking to recoup excess tax and National Insurance payments. Nikki Ainscough, managing director at York's Equilibrium Accountants, highlighted the plight of a client who overpaid on PAYE and has been told to hang tight until August for reimbursement, despite lodging the request in March. "We are being told they are going to need to wait until August for the funds to be released, for a request we put in [in March]," Ainscough revealed. An HMRC screenshot confirmed the grim forecast: "You can expect a reply by 22 August 2025", indicating the tax office is still sifting through requests from the previous December. Ainscough, with 12 years at the helm of her practice, expressed that such hold-ups were unheard of. "I've never experienced this ... Why has it jumped so significantly?" she questioned. She suggested that the sizeable backlog hints at a large volume of claims and a potentially hefty sum owed to small businesses and individuals at a time when cash flow is paramount. Even for self-assessment tax refunds – where the wait isn't as bad – HMRC has warned that payments may take up to 12 weeks longer than the expected date. One customer, who's supposed to get back over £1,000, might be twiddling their thumbs until September. The crunch in HMRC's service levels appears to have been exacerbated by some staff participating in strikes, mainly those dealing with PAYE and CIS repayments, adding to the delay woes. An HMRC rep has owned up to the setbacks but was quick to reassure: "We're tackling response times for these refund claims by allocating extra staff to work on them." They also boasted about a jump in customer satisfaction, saying: "We've made significant improvements to our customer service overall. Customer satisfaction stands at about 80%, and the funding settlement we have received means we'll be able to meet our service standards in 2025–26." Meanwhile, small businesses are left reeling from HMRC's decision to pull the plug on its gratis online tax filing service. This blow means come April 2026, loads of little firms will have to fork out for commercial software to submit their corporation tax returns. Standing by the decision, an HMRC spokesperson said: "This transitional service was introduced in 2015 to help small, unrepresented companies switch to online filing when there was a limited software market. "It's right that we close this outdated support now that there's a range of commercial software which provides a much better service, and we've published guidance to help companies prepare for the change."
