HMRC taking greater than a yr to pay out tax rebates

[ad_1] Some persons are ready a yr or extra for HM Income and Customs to refund overpaid tax and nationwide insurance coverage contributions (NICs).

In some instances, refunds that had been beforehand processed inside just a few weeks are taking 10 months or extra, an investigation by Guardian Cash has discovered.

Self-employed building employee Simon Hughes* mentioned he and his spouse can't afford a honeymoon till he receives £4,550 of overpaid tax he claimed final April. “The final time I contacted HMRC, it mentioned I may very well be ready till July 2026,” he provides. “When individuals owe it cash, they get fined for late cost, however when it owes cash, it may take so long as it likes with out penalty.”

The Institute of Chartered Accountants in England and Wales (ICAEW) mentioned “vital backlogs” had been having a adverse impression on companies and people, and HMRC’s deal with response targets for present claims left older requests behind the queue.

HMRC’s personal service updates present there are claims being processed for reimbursement of tax from employment or pensions relationship again to January 2025, mentioned Lindsey Wicks, an ICAEW senior technical supervisor taking care of tax coverage. “Self-assessment repayments are nonetheless being processed for requests made in March 2025. Efforts must be targeted on clearing the previous backlog, reasonably than responding to new correspondence.”

British pensioner Jill Eden*, who lives within the Netherlands, mentioned she needed to borrow cash whereas ready for a £48,000 rebate from HMRC.

“I pay Dutch tax on my pension and, since my husband died two years in the past, HMRC has additionally taxed it on the price of £2,100 a month,” she mentioned. “I submitted a refund declare in April below the double taxation treaty and was instructed it will be handled by October, however I’ve heard nothing, and it’s unattainable to contact it by telephone. I'm 83 and questioning if HMRC thinks my age is to its benefit as a result of, as soon as I die, it is going to be in a position to dangle on to this cash for years.”

Jane Leigh*, who lives in France, was instructed that the refund of £78,000 in tax due after she cashed in her UK pension had been accepted in September, seven months after she submitted her declare below double taxation guidelines. She instructed Guardian Cash she was nonetheless ready for the refund. “I maintain being instructed the cheque has been despatched, then given completely different explanation why it hasn’t arrived,” she says.

“Every time I’m instructed to attend six weeks for progress.”

HMRC mentioned it was investing £500m in digital providers to hurry up refunds. {Photograph}: Martin Godwin/The Guardian Whereas taxpayers face stiff penalties if they're late with funds, HMRC pays modest compensation when it misses its personal targets. Taxpayers are charged curiosity calculated on the Financial institution of England base price plus 4% (presently 7.75%), whereas HMRC is just answerable for curiosity at 1% beneath the bottom price.It has additionally emerged that some workers with a couple of job are reporting lengthy waits for refunds of overpaid NICs.

Kabir Das, who works throughout completely different NHS departments, was anticipating his refund final April however mentioned he was instructed his declare won't be processed till this September.

College professor Linda Ashcombe*, who holds two roles, is overdue £1,000 since submitting a request in April.

“For 15 years I’ve had my overpayments refunded inside six weeks. This yr I used to be first instructed my request must be acted upon by November,” Ashcombe mentioned. “In December, HMRC’s on-line tracker mentioned March 2026. Name centre brokers say they will’t perceive the delay or do something about it. What the hell is occurring?”

HMRC mentioned it will examine all the instances referred to it by Guardian Cash. For the reason that paper bought in contact, most have acquired their refunds.

It added: “We obtain tens of millions of tax refund claims yearly, and the overwhelming majority are paid promptly, however we apologise to these experiencing a delay. We’re dedicated to slicing wait occasions and are investing £500m in digital providers to hurry up refunds in addition to assist prospects pay the precise tax first time so fewer refunds are vital.”