A couple of recent cases have highlighted to us at CheapAccounting.co.uk that HMRC are being rather less than forthcoming with tax refunds due to tax payers.
From time-to-time legitimate situations arise where the tax payer overpays tax; for example as a result of making payments on account against a decreasing annual tax liability.
Recently we have handled two cases on behalf of clients where HMRC have been withholding significant tax refunds due without good cause or reason; the amounts run into thousands of pounds.
In fact one case has gone on for months and we only managed to secure the refund after “threatening” HMRC with a complaint.
Personally I find this morally repugnant!
If HMRC find that a tax refund is due to a tax payer that refund should be paid to the taxpayer as soon as possible; just in the same way that we all have to pay our taxes in a timely manner.
Accepting of course that facts and figures do need to be checked; such checks need to be done speedily and the refund should be paid out in days & weeks rather than weeks and months.
What to do if HMRC hold onto your money
Our advice for how to handle HMRC when you think you are due a refund of tax is very simple:
- Check the facts & figures of your overpayment
- Write (don’t telephone) HMRC asking for the refund due; make the letter short and include the facts of how you have arrived at the refund due or a copy of the tax return(s) that the amount relates to
- Give HMRC 14 days to check the facts and figures and to issue the refund
- If they delay beyond this write back; give them 7 days to issue the refund and advise them that if it is not received a complaint will be opened
- If the refund is still not received do follow this up with a complaint; this is easy to do. HMRC explain their complaints process here: http://www.hmrc.gov.uk/complaints-appeals/how-to-complain/make-complaint.htm
Don’t be stalled by HMRC; whilst they may come over to you as being a scary beast they do, according to their Charter, need to act professionally and with integrity. Unfortunately we are beginning to see a trend of aggressive behaviour on their part with an unjustified moral high ground being taken by, luckily enough, a small minority of staff.
Of course HMRC have been targeted with collecting unpaid tax but I do think they need to remember than the vast majority of people do pay their taxes on time; in fact some overpay.