Partner Article

All I want for Christmas…is my tax refund!

This week HMRC proudly announced that £32m has rapidly flowed into the Treasury’s coffers in response to the Accelerated Payment Notices (APNs) recently issued to users of tax schemes. Clearly HMRC is pleased with this early Christmas present and we wonder whether the department might be just a little surprised with the speed of the receipts.

But what about those ordinary taxpayers who are owed tax repayments from HMRC – can they expect a refund as quickly? Sadly, it would appear not as we are increasingly hearing of significant delays by HMRC in repaying those who have overpaid tax.

Quite rightly, HMRC has to carry out security checks to ensure that refund claims are legitimate and that the tax system is not under attack from criminal fraud gangs. However is the “a random security check is necessary” approach merely an excuse for a lack of resource at HMRC in dealing with genuine taxpayers who want their money back? Or is it, as the cynics might say, that the Scrooges at the Treasury are trying to hang on to taxpayer funds for as long as possible?

In chasing one particular refund, HMRC advised that a response could be expected by 26 December – too late for Christmas (and does the taxman really work on Boxing Day?) – but “within 30 days” of the case being submitted for the security check. Understandably, efforts were made to expedite the process but a request to speak to somebody more senior was refused. The next day, another officer advised that whilst the repayment was indeed approved on 27 November, it was not possible to identify the reason for the security check, nor could any explanation be offered as to why the process took so long. The caller was further advised that a manager would be available to take a call the following day but there was no point trying because it was unlikely they’d know any more and in any event the refund might yet be released early….!

This is of course just a single example. However, the same issues are known to have been experienced by other taxpayers and their advisers.

The new APN regime is just one of a number of rules which exist around people speedily paying HMRC what they owe… but there are very few rules regarding the timing of HMRC repaying customers. Why does this matter? In a few years’ time, ask those APN payers who are found by the Courts to have no additional liability. How quickly will HMRC pay them back?

This was posted in Bdaily's Members' News section by Baker Tilly .