HMRC says that 20% of tax rebate requests now take longer than its own target of 15 days for payout. It has said this is because of increased levels of checks following a huge surge in attempted self-assessment fraud.
"It seems criminal gangs are obtaining the personal details of taxpayers to submit bogus claims!"
Teenagers and pensioners are being targeted via social media sites with fraudsters asking to borrow their Government Gateway login details and offering victims a share of any refund claimed and received.
Over £1 billion of fraudulent claims were made last year and HMRC said it is deeply involved with law enforcement agencies to stamp this new scam out. Four men were arrested in February in connection with this fraud and other money laundering offences.
For some of my own clients, these delays have meant a wait of up to six months for rebates to be paid out. This all started during the pandemic when HMRC was distracted with support schemes, so these scams have been going on for nearly two years now.
It's typical HMRC where they're quick to pursue underpaid tax, but slow to hand back any overpayments. This is a particular nightmare when we're all struggling with the cost of living crisis. The longer they take to pay out, the more taxpayers now lose in real terms.
"They've also frozen refund interest while increasing late payment interest and fines!"
HMRC claims to have improved waiting times and has reduced the time it takes to repay, but I can't help but feel that furlough had a massive impact on all this. 80% of refunds are clearing quickly, but you may be waiting a lot longer, so be warned.
Until next time ...
ROGER EDDOWES Business Godparent
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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