ITSA refund security checks

HMRC delays to refunds

We’ve been receiving many reports of unreasonable delays in tax refunds. HMRC has said the delay is for extra security checks to prevent fraud. A typical situation is where a taxpayer requests a refund of tax overpaid that’s already showing on their HMRC online account. Months can go by without any response from HMRC. Although HMRC may send a letter to verify a taxpayer’s identity, in other cases nothing happens and the delay in making the refund continues without explanation.

The webchat function which HMRC recommends as a means of resolving questions about your tax is often a waste of effort. It’s worth a try as a first port of call but don’t expect much from it.

Identity checks

If you’re subject to an identity check from HMRC it will ask for your personal information and documents. Your refund will be held up until you respond.

Reply to HMRC within 30 days of the letter’s date. Make sure the recipient address and reference are correctly quoted, and retain copies of all correspondence.

Occasionally, no response can result in your removal from the self-assessment system.

Official response to delays

Judging from the plethora of frustrated messages on HMRC forums, successive apologies are made by HMRC staff with statements to the effect that a delay of around six weeks is typical, but it can take longer due to the high volume of repayment requests or even the “current position in HMRC”. Ironically, the high volume of refunds being processed at any one time is substantially caused by HMRC’s own delays and tardiness.

If you’ve tried the webchat without success, your next option is to phone HMRC. The bad news is that you can expect to wait in the queue for up to 45 minutes before speaking to someone. Surveys have found that the best time to call is between 8am and 11am towards the end of the week, Thursdays especially.

Steps to speed up refunds

On your self-assessment tax returns ensure your bank details are entered correctly and indicate that the repayment should be made via bank transfer.

Don’t ask for refunds by cheque where possible, as these take much longer to process and risk getting lost in the post.

Submit your tax return as soon as possible after the end of the tax year. Especially avoid filing your tax return during HMRC’s busy period, which is between July and January. Where a tax refund is delayed, use HMRC’s tool to check how long it will be or contact the self-assessment team and then raise an official complaint.

Keep screenshots of all HMRC acknowledgements and note reference numbers so you can quote these in correspondence.