HMRC takes a backward step…
Making Tax Digital is the latest in a programme of changes designed to move tax payers away from paper records and into the digital age. Self Assessment filing online and Real Time Information for payroll are two other examples of shifts to regular and digital filing. So why has HMRC change to a paper based system for personal tax Repayments?
In previous years, it has been possible to file Repayment Claim forms R40 online, but now the forms must be posted to HMRC. Not only that, but the repayment cannot be repaid directly into the tax payers bank account, but will come out by cheque. This will obviously need to be delivered to a bank to be paid into an account.
The cynics amongst us may well suggest that this is another example of HMRC slowing the rate that funds leave their accounts, and are returned to the tax payer. The other examples above all streamline the ways in which HMRC obtains information or tax payments, so are positive for HMRC.
Coming under sterner targets for the tax they collect, are they purposely slowing the rate of refunds?
We encourage clients to regularly review their processes and customer journey to get funds into their bank accounts as early in the cycle as possible. It seems HMRC may have been reviewing their own processes and identified this as a way to hold on to cash a little longer…
If you’re unsure of the process for obtaining a tax refund, or feel that you may have been paying too much tax, please get in touch. You may also like to look at our guide ‘7 Tax Saving Tips for you and your family‘.