HMRC tax refund changes ‘will cause chaos’

Saving and Making Money

Updated on 02 November 2015 | 2 Comments

Accountants warn new policy will lead to big refund delays and cause chaos for taxpayers.

HM Revenue & Customs' (HMRC) new system for processing refunds has been slammed by a top accountancy firm, which has warned that taxpayers will endure massive delays before getting their cash back, if indeed they even get the refund they are entitled to.

If you make tax payments directly to the taxman, for example if you complete a self-assessment form, then chances are you make that payment with a debit or credit card.

While you may specify a bank account for the taxman to pay any refunds into on your tax return, new rules mean that HMRC will ONLY pay that refund onto the debit or credit card you last used to pay your tax bill.

And according to accountancy firm Blick Rothenberg, this change will cause chaos, and may lead to misplaced repayments.

Nimesh Shah, personal tax partner at the firm, pointed out that if the last payment was made from an account which has been closed, or the card has expired, then the repayment will be rejected. It will then fall to the taxpayer to provide HMRC with alternative details on how to receive the repayment.

And according to Shah, this could mean severe delays to repayments, or potentially even taxpayers missing out on the refund they are owed.

However, HMRC was forthright in dismissing Shah's claims as "complete and utter nonsense", insisting that refunding to the card used for the initial purchase was standard practice. 

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