Will HMRC refund tax overpayments within 30 days?

Accountants may be interested to learn the HMRC could be forced to refund businesses with any over charged tax within 30 days.

Mike Freer, a conservative MP, brought forward a private member’s bill recently in a bid to make HMRC’s policy on tax refunds fairer. If businesses do not pay HMRC within 30 days they are fined, but no penalties or deadlines are imposed on the Revenue if it does not issue income tax refunds in a timely manner.

The MP pointed out that small businesses can see huge fluctuations in their month-to-month income and this could result in an overpayment of tax come the end of a financial year. HMRC takes far too long to repay this money and it doesn’t seem to realise that a lot of businesses have huge cash-flow pressures.

He went on to say that the Revenue’s late payment rate is 3% but it only applies a rate of 0.5% to unpaid refunds.

The bill will receive its second reading on the thirtieth March next year.

Meanwhile employee morale at the Revenue is so low that customer service levels continue to suffer.

According to the most recent HMRC staff survey, less than one in five Revenue staff feel motivated to help the department meet its objectives. Furthermore, 63% of employees think the Revenue does not deal with poor performance effectively.

Whilst these results sound bad, they are actually an improvement on last years! Worries over job security could be a major demotivating factor but a mere 17% of HMRC employees feel confident that senior managers make the right decisions and only 13% think that departmental changes are made for the better.

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