Press Release
June 2009: Three month delays in tax repayments causing serious cashflow problems, says UHY Wingfield Slater
Thousands of financially struggling taxpayers are waiting up to three months or more for repayments of tax from HM Revenue & Customs (HMRC) as a result of new random security checks, says Sheffield city centre accountants UHY Wingfield Slater.
UHY Wingfield Slater says that a number of its clients, which include both individual taxpayers and small businesses, are waiting for significant tax rebates and are experiencing severe cashflow difficulties as HMRC sits on the tax.
According to UHY Wingfield Slater, since January 27 this year taxpayers are no longer being paid interest on repayments of tax owed to them. HMRC, however, is still legally entitled to charge interest above the Bank of England base rate in addition to surcharges on tax which taxpayers fail to pay on time. Neither is there any compensation for the new extended delays on the tax owed to them by HMRC as a result of security checks.
UHY Wingfield Slater says that the tax repayments show as having been made on the online client record but the repayments are blocked at the last minute while security checks are completed.
Peter Newsam, tax partner at UHY Wingfield Slater, said: “Delays in repaying tax to which taxpayers are fully entitled are causing enormous financial distress at a time when many businesses and individuals are teetering on the edge of survival.”
“HMRC expects taxpayers to pay their tax on time or face interest and penalty charges. It’s seems rather unfair that when the boot is on the other foot and HMRC takes months to issue refunds it does not have to financially compensate taxpayers. It’s a disincentive for HMRC to process refunds promptly.”
He added: “This is a growing problem which seems to have worsened with the recession. While security checks are important to minimise fraud, we have reached the point where tax repayments are not being made unless HMRC is repeatedly chased over several months. The new team within HMRC set up to process security checks appears to be inadequately resourced.”
UHY Wingfield Slater points out that with HMRC having recently earmarked a quarter if its budget (£1 billion) for tackling tax evasion, it could spend more on ensuring that other parts of the organisation are running smoothly.
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