HMRC Tax Refunds Delayed
HMRC is delaying the payment of self-assessment tax refunds without extensive and onerous information, says accountants Hillier Hopkins.
The accountants have seen a dramatic increase in letters from HMRC to clients demanding extensive documents and information that it calls ‘security procedures’ to make sure the ‘repayment amount claimed is correct’.
‘These security checks are unusual and worrying.’ says Debbie Wilson, director and head of trusts and estates at Hillier Hopkins.
‘HMRC states in these letters that they are not an investigation into the self-assessment return itself but they could easily be misconstrued as one in the threatening language used and implications if an individual fails to respond within 30 days. Individuals face removal from the self-assessment regime and delays on receiving grants under the Self-Employment Income Support Scheme,’ said Wilson.
‘Whilst we totally understand HMRC’s need to prevent fraudulent reclaims, individuals expecting a tax refund are being hit with the suggestion that their tax affairs are questionable and deliberately wrong.’
Individuals are asked to complete form R38 that requires extensive information, together with proof of identity and address. HMRC has dismissed these letters as nothing more than a simple identity check, but taxpayers expecting a refund may be concerned to receive the request for this additional information.
Wilson said: ‘HMRC has confirmed that these letters are triggered when unspecified ‘risk indicators suggest that the customer or claim may not be legitimate’. HMRC also recognises that these letters will arrive on doorsteps of individuals making entirely legitimate claims. There doesn’t seem to be any pattern to their use.
Annual tax revenues received by the Treasury have reduced by £49.1bn this year as a result of the pandemic, according to a recent announcement. Is this connected to the delayed repayments? We can’t be sure, but would hope not!
If you receive any correspondence from HMRC, we would strongly recommend that you send us a copy. If additional information is required, we can take care of that on your behalf, and often prevent any escalation.
Similarly, if you are awaiting a refund from HMRC that appears to be taking longer than expected, please let us know, and we can do our best to chase that up for you.
We send regular updates that keep clients aware of changes and suggestions on a wide range of subjects; if you’d like to receive those too, just add your details below and we’ll do the rest! We promise not to bombard you and you can unsubscribe at any time.