Excessive delays at the tax office have resulted in rebates going unpaid for months on end, causing severe stress to smaller businesses, some of which are at risk of going under as a result. According to recent articles in the accountancy trade press and elsewhere, the amount of post turned around by HMRC within 15 days is currently only 39%, less than half its 80pc target.
Normally, these things should take a couple of weeks, but now they are taking months. Taxpayers are not getting large refunds they are due, which, in turn, has a detrimental effect on businesses’ cash flows.
Although HMRC have for years had very poor response times matters are now significantly worse. Undoubtedly one of the main reasons, perhaps unsurprisingly, is the reluctance of civil servants to return to their offices. All the articles we’ve seen on this subject say that HMRC staff working from home is one of the main causes of the delays, although, to be fair, the clampdown on furlough fraud requiring taxpayers to provide additional verification is also to blame. This is backed up by our own experiences when speaking to HMRC staff during telephone calls who mention the difficulty in printing letters and other documents, contacting colleagues etc.
By way of example, we and other accountants and tax advisers currently get automatic emails back on certain VAT matters, telling us it will take at least 12 working weeks before a response is issued and not to call in the meantime. However, they add that if the matter is urgent we can provide certain information and they will try and deal with it urgently within three to four weeks!
As mentioned at the top of this article, to make matters worse, any tax repayments involving earlier years are generally taking months to receive. Given HMRC are once again pushing hard to collect tax arrears
One exception is R&D tax credit repayments, which are generally turned around within two to three weeks of submission, despite the fact that more thorough checks are now being implemented due to so many claims being submitted by dodgy operators submitting false claims.
To illustrate some of the difficulties we (and the other accountancy firms) are having, we recently had a security check call from a withheld number (someone working from home) about a furlough claim. The caller wouldn’t give the client details or a reference and wanted some specific information before they would speak to us. The call seemed so dodgy we were concerned about the security of our client’s details so didn’t provide any information, but we then got an email advising that the furlough claim was rejected (it has now been re-instated). Given all the ‘scam’ warnings (see our previous blogs) about contact from HMRC, this method of contact and approach was unacceptable and we have submitted a formal complaint. It will be interesting to see how long that takes to get resolved…
Overall, in the past year, things have proved so bad in terms of HMRC’s service levels (and yes, we know there has been a pandemic so have cut HMRC a bit of slack), we have submitted about a dozen formal complaints and sought recovery of professional fees due to mistakes and delays which has resulted in thousands of pounds being reimbursed to our clients. If you are having difficulties of this kind, or any other issues with HMRC, do get in touch. As genuine tax specialists, we are well placed to help.
Stewart McKinnon, Director, M&S Accountancy & Taxation Ltd