Entrepreneurs due for tax refunds may be in for a long wait to get their money – without any interest being added – as HM Revenue & Customs (HMRC) battles a backlog of claims and tries to find ways to speed up refunds by automating some of the manual checks.
“I feel sorry for businesses claiming refunds: some are effectively being treated as if they have made false claims, perhaps as a knock-on effect of the problems with MPs’ expenses,” comments John Cassidy, tax investigations partner at PKF accountants and business advisers.
Tax refund claims that are selected for manual security checks to ensure that they are not fraudulent will be transferred to a new specialist unit in Bristol for further investigations – without telling the taxpayer.
This special checking unit only accepts written communications so, once a case is referred, there is no way to speed up the process or find out why a refund has not been made.
“I don’t see the need for this somewhat clandestine operation, with no facility for telephoning HMRC,” continues Cassidy. “Obviously HMRC does have to protect the public purse, but it ought to be able to carry out sufficient checks on most businesses very quickly.
"I’d like to see some statistics on how many refund claims eventually prove to be fraudulent – I expect the number will be miniscule with the loss of revenue too small to justify such delays for honest taxpayers.”