An 'uncleared' payment of £1 could delay a £10,000 Self Assessment refund indefinitely

An 'uncleared' payment of £1 could delay a £10...

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I've had two incidents in two days where a refund has been requested but HMRC have ignored the request due to a 30 day 'uncleared items' window before the request.  This window is entirely new to me (and maybe to you).

So if a payment hits an SA account, that doesn't clear through HMRC's statement system for 30 days, and if you make a repayment request by just about any means during that window, HMRC will not process it.  Also HMRC will not tell you they have not processed it.  Your client will.

Situation 1: The client had paid their summer July 2014 POA back in June.  We subsequently did the return, there was a refund, and the refund was requested on the return with an X in the 'send me a cheque' box, near the end of July.  If we had held off submitting the return for something like 5 days, there would not have been a problem.  Client called us.  I requested the repayment using the website.  It is now pending - it is at least being processed.  Presumably HMRC can delay it another 3 weeks for 'security checks'.  (I have in my mind an overweight security guard eating a sandwich in front of a TV screen, grunting 'hmm' in approval).  Called HMRC, and discovered this 30 day window in conversation with telephone bod.

Situation 2: The very next day I get an email from another client, the repayment hasn't arrived.  This was a specific amount.  We deliberately did not request a repayment on the Tax return, as HMRC would have repaid the lot.  We requested a balance so that the next January payment was already in place.  We are being good, diligent, prudent and letting HMRC hold money they are not entitled to (the figures are £300 left on account, £700 requested back).  We are 5 months early paying the January payment.  £700 repayment hasn't appeared.  Has not gone from HMRC's site, even though I have the submission printed off from the week before (7 days ago).  Forewarned and forearmed from yesterday, looked on website and see a £30 payment on 1 September - I requested repayment 4 September.  Again, phone HMRC and the 30 day window is in place - that money will not move at all due to an uncleared item on the account, and I can't request it to come until 1 October or so.  Where has this £30 come from?  There is no DD in place (there had been previously - but that ended in April).  Telephone bod did not know the source of this £30 - there is no DD agreement in place on HMRC's system, and it would have to be a proper agreement. I've been in communication with my client, and they knew they had no tax to pay as I had set it out in my letter in August.  However, they had gone to their bank, and set up a £30 electronic payment to start on 1st September - of course they did not previously tell me this - and this is after reading my letter saying everything up to January 2015 had been taken care of.  Interestingly the client put that down to 'overcaution' in making sure they didn't get any tax bills, but listening to them on the phone, it was like talking to Speedy Gonzalez - the client is breathlessly female and seems to be constantly in a hurry.  I wouldn't call that overcaution, I'd call that impulsive.  I had to compensate by slowing down my voice, to try and hoick her back down from the ceiling - like an escaped deflating balloon in my butterfly net.

You can see that I could make a £1 payment, stick it on a client's UTR (by accident or design) and that would put an automatic 30 day freeze on any repayment however large.  People could put the wrong UTR on their payment, and it could freeze requests on another person.

And it isn't a 30 day delay - requests are ignored for 30 days.  They aren't put into action after 30 days.  You would have to make another request after 30 days, and if you don't the repayment would sit there forever until someone noticed.

Also when I talked to second telephone bod, they speculated that there would be no use escalating to technical, and I'd have to write to Liverpool PO Box 1970 (called that because it actually is in 1970).  I say write - it's likely to be a cruise missile.  I can wait till October to get the repayment, but why should I, and what if a person makes these payments every month? A rolling window?  Maybe shows that paying regularly, but not through an HMRC agreement, is a potentially dangerous thing.

My accelerated client will cancel their electronic payment, and restart in February.

Does anyone else have any experience of this?  I know I had repayments early this year which didn't appear, and I'm thinking payments might have been made in January, so that killed any repayment requests in Feb/early March.  But it was an annoying mystery at the time.

Also what if my client *does* want to pay every month - they're entitled to do that.  Why can't we get our money back?  Why should we have to close down all windows, cancel a payment, get the repayment, and then restart the computer in order to get it back?

Do we just live with this and accept that we ought to put proper regular payments in place via HMRC, or are HMRC being antiquated?

S

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By Carat
11th Sep 2014 14:59

Happened to me too with my personal tax return - a repayment of c£500 was held up in exactly the same way

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By stevebritgimp
12th Sep 2014 16:32

Did you just reapply a request?

I'm definitely going to write a missile when I get a chance (prob next week now).

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