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.
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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.”
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.
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