Accountancy firm attacks rebate delays

Thousands of taxpayers are waiting for excessively long times for tax rebates as a result of random security checks by an 'inadequately resourced' HMRC team, according to UHY Hacker Young.

The accountancy company claimed that a ‘significant number’ of its clients - both individuals and small businesses - have been waiting for at least three months for the taxman to repay more than £500,000, leading to severe cash flow difficulties.
 
The firm criticised the lack of compensation for the delays and the fact that tax repayments show on online client records as having been made, but the money is being blocked at the last minute while newly introduced security checks are completed.

The Revenue recently earmarked a quarter if its budget (£1 billion) for tackling tax evasion, but the department should spend more on ensuring that other areas such as the security-checks team are running smoothly, said UHY Hacker Young.

Tax manager Rob Durrant-Walker remarked: ‘Delays in repaying tax to which taxpayers are fully entitled are causing enormous financial distress at a time when many businesses and individuals are teetering on the edge of survival’.

He added: ‘HMRC expect taxpayers to pay on time or face interest and penalty charges. It seems unfair that when the boot is on the other foot and the Revenue takes months to issue refunds it does not have to financially compensate taxpayers. It’s a disincentive for the department to process refunds promptly.’

‘This is a growing problem, which seems to have worsened with the recession. While security checks are important to minimise fraud, we have reached the point where tax repayments are not being made unless the taxman is repeatedly chased over several months.

‘The new team within the Revenue, set up to process security checks, appears to be inadequately resourced.’

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