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Delayed HMRC tax refunds?

I came across this interesting blog on CheapAccounting.co.uk about HMRC delaying some of their clients' tax refunds, in one case up to eight months. 

I was wondering if anyone else has experience of this? If so, what do you do in this situation?

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Yes, it has

occurred, quite often, recently.

Cases can of course be (randomly) selected for verification and security checks but, from my experience, you will often be given an anticipated date when HMRC expect the refund to be made, if you contact the agents dedicated helpline.

Where I've been unable to obtain a satisfactory explanation I've gone to the AAM department and that has brought a fairly quick solution.

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By ACDWebb
25th Jan 2013 15:07

Not recently

Repayments claimed in client returns with bank details have generally been paid to the clients bank within a fortnight

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By DMGbus
25th Jan 2013 18:49

Presumably there's some risk assessment built into HMRC systems to  (I would hope) only delay repayments where there's risk to HMRC from dodgy looking tax claims.

I do wonder about agents who have two or more of the following hallmarks:

Client tax repayments always paid to themselves as a policyTend to be involved with clients making higher than normal tax repayments for the type or size of trade / circumstancesAgent's fee is a percentage of the tax repayment claimed

In such circumstances it might be argued that HMRC really do need to check carefully clients who might be tarnished by association with dodgy-looking agents with 2 or more of the hallmarks above.

 

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26th Jan 2013 07:24

There are two circumstances I've encountered

1. A repayment of £10,000 was delayed for several months in 2010 by the Repayment Security Office in Bristol. The refund was released after we had solicitors prepare legal papers for a writ of mandamus against Dave Hartnett - a regional customer services manager intervened to prevent us serving papers by arranging immediate repayment by BACS.

2. There still exists a problem whereby a repayment won't be made if an inward payment exists within the 30-days prior. Never quite figured out the rationale for this one, but it's only rarely been an issue as most payments are quarterly / bi-annual.

The Repayment Security Office in Bristol is still a bit of a black hole as far as communications by agents and clients go, but senior customer service staff do seem to be able to escalate repayments or provide reasonable estimates for how long the RSO clearance will take.

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26th Jan 2013 11:26

Delayed repayments

I have seen an increase in the amount of time required to process repayments, especially VAT Voluntary Disclosures. One 'method' appears to be setting a date 2 or 3 (or more) months in advance to visit to verify the claim.

The main problem is that the taxpayer has to do the chasing and, in some cases, establish the legal right to the money.

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27th Jan 2013 19:12

It's not a new problem

Here is a link to an article by Rebecca in December 2010.

http://www.accountingweb.co.uk/topic/tax/repayment-held/465868

Having looked at the linked article in Rachel's original post, I suspect the cases they are referring to have been Selected rather than Inhibited.  But it's always worth checking which does apply in any individual case, as most Inhibited ones can be sorted without the involvement of the special team (apparently based in Bristol).

Amazingly, the links in Rebecca's article to the HMRC website do still work.

Kind regards

Shirley

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By norstar
28th Jan 2013 12:30

SA - generally no, PAYE & CIS - getting worse by the day

I find that where we request a refund in an SA return and specify our client account to receive it, it usually comes through within a fortnight. We have recently found HMRC ignore this sometimes however and they randomly send cheques to the client instead.

Incidentally GMGbus - that's a foolish thing to say. I request client tax repayments to be paid to my account these days as a policy to a) check the repayment is issued and b) to improve my chances of having my fees paid. A lot of our clients are CIS self employed types, and so of course have repayments. That does not make us a "dodgy looking agent".

There is however, in my opinion, a serious problem with the PAYE system. HMRC are levying penalties for late paid PAYE where it's a day late, and yet recently, they refused to repay £30,000 of overpaid PAYE where the directors deliberately overpaid it because they were so nervous of ending up short. HMRC delayed and argued and even tried to say that as the PAYE was paid over, the directors had effectively contracted themselves to an equivalent salary!

It took seven months to obtain. No interest added. Who pays the fees to try and obtain this?

As for CIS. What a joke. Almost every single CIS client has had HMRC refuse to repay their full claim because the contractor - usually a big company - hasn't submitted all the statements. Despite our client providing statements, and/or bank statements supporting the deductions, HMRC have still maintained that as the contractor hasn't filed the statement, our client can't have the repayment.

Getting beyond a joke now. The system is broken - why bother with statements if you won't honour the deduction shown on them.

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24th May 2013 09:00

Self Employed Refund

Hi,

From reading your comment its evident you are confident in what you are talking about. Wondering can you advise me or even give me your opinion on my circumstance. I had my accountant do my self assessment returns for this year. I sent my figures to him and he did the rest. He came back to me 2 weeks later with a figure of what i would be refunded. Its 2 months now and i still havent had any refund nor correspondance from HMRC and neither has my accountant. I took it upon myself to call HMRC 2 weeks ago and they confirmed they had received my application and are just doing some extra security checks and should be processed soon.The latest i have ever waited in the past was a month so now im curious to wonder why so long this year. Can you send me your thoughts? 

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28th Jan 2013 13:34

Wouldn't it be lovely if, when HMRC owed money, they were forced to follow the same over-enthusiatic interest and penalties regime taxpayers have inflicted on them !

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