Firms hit by refund delays

Thousands of small businesses are suffering financially due to chronic delays in issuing tax refunds.

Delays in handing out refunds — valuable cashflow for many struggling firms — are so bad that HM Revenue and Customs (HMRC) has been forced to publish an apology to accountants and their clients as part of its regular guidance.

HMRC insists the delays are down to more rigorous security checks, which has resulted in many more self-assessment refund claims being sent for review to a specialist team that has been set up in Bristol.

These claims have been rubbished by the Institute of Certified Practising Accountants, the membership body representing general practice accountants in the UK.

Chairman Tony Margaritelli said: “Refunds are taking an interminable amount of time. Many accountants are pretty unimpressed by the excuses — the general consensus is that the Government wants to hang on to the money as long as possible and has asked HMRC to drag its feet.

“What is most galling is that HMRC has been encouraging accountants to file self-assessment for clients because refunds are automated and should come through within days.

“Last year the system worked smoothly, but this year payments are months overdue.”