Whilst the move towards online filing and payment of refunds direct into taxpayers’ bank accounts has led, in a number of cases, to a reduction in the length of time that taxpayers have to wait for repayments. This is not the case for all repayments and refunds.

In response to a number of fraudulent refund applications, HM Revenue & Customs (HMRC) introduced security checks on a random sample of repayments and these can delay the receipt of the refund. In many cases the resultant delays will last in excess of one month and can last a substantially longer period.

Whilst these checks are intended to be random, the instances of delays tend to occur more frequently on larger repayments and on those where there is a greater perceived risk. Unfortunately, these are often the cases where the refunds are urgently needed by the taxpayer due to other financial burdens.

These security checks are performed by a specialist department of HMRC who are not contactable by agents or taxpayers. As a result there is very little that can be done to speed up the process once a repayment is selected for security checks, which is frustrating for both taxpayers and tax advisers alike.

This is a classic example of the way that HMRC are not commercial and do not emphasise with taxpayers’ needs and frustrations. The security checks are carried out in an insulated environment leaving the tax adviser to deal with the client’s understandable frustrations, whilst at the same time not being able to take significant action to resolve them. This can often cause harm to the relationship between the tax adviser and his client.

Until HMRC empathise with the needs of taxpayers and their advisers, these frustrations will continue and clients should not ‘spend the refund’ until it has been received into their bank account.

If you require more information on the delays and how it may affect you, please contact tax@menzies.co.uk.