HM Revenue and Customs (HMRC) faces sharp criticism over delays in processing tax refunds. Accountants report that waiting times have stretched beyond four months, compared to just weeks in the past. The urgent improvement is needed rings across complaints.
Small businesses and individuals say these delays hurt their cash flow. Nikki Ainscough, managing director of Equilibrium Accountants, described waiting months for refunds on overpaid tax or national insurance. One client, she said, must wait until August for a refund request submitted in March. She shared screenshots showing HMRC is still handling cases from December 2024.
Ainscough has run her firm for 12 years and says she has “never experienced this.” She warned that such delays point to a huge backlog and substantial sums owed. “At a time when cashflows are critical, urgent improvement is needed,” she stressed.
The delays particularly affect employers under the PAYE system and the Construction Industry Scheme (CIS). While self-assessment refunds face slightly shorter backlogs, HMRC has warned some cases may take another 12 weeks after the initial estimated response date.
Part of the issue, it’s understood, stems from HMRC staff involved in PAYE and CIS refunds participating in industrial action. An HMRC spokesperson acknowledged the problem and said, “We’re tackling response times by allocating extra staff.”
Despite the complaints, HMRC claims overall customer satisfaction remains at about 80%. The spokesperson added, “With the funding settlement we’ve received, urgent improvement is needed to meet our service standards in 2025–26.”
Adding to the frustration, HMRC recently announced it will shut its free online filing service by March 2026. This tool, used by many small businesses, will be replaced by paid third-party software. One business owner said, “It seems like a retrograde step.”
Accounting software subscriptions can cost £15 per month or more, while one-off purchases may exceed £100. Ainscough noted that some software firms are “cashing in,” though others still offer reasonable pricing.
HMRC explained the change, saying the old system “does not meet modern digital standards.” They assured that guidance is available to help businesses transition smoothly. Still, many argue urgent improvement is needed in both processing times and support services.
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