CT rebates 'taking twice as long as last year'

Firms are waiting twice as long for corporation tax rebates from HMRC as they were a year ago, according to UHY Hacker Young.

The accountancy group said many of its clients have been expecting CT repayments for more than a month, with some left waiting for two months or more. Less than a year ago, the average turnaround by the Revenue was seven to 14 days, added the company.

It went on to claim that the recession has left a growing number of businesses with losses, entitling them to claim back tax paid in previous years. In the most recent Budget, the Treasury announced that firms reporting a loss would temporarily be able to claim up to an additional £50,000 of tax relief in earlier years, to help ease financial pressure during the recession.

‘One small business we advise only just received a repayment for £35,000 after the claim was filed electronically five weeks ago… We now often have to chase HMRC for repayments before clients receive their money,’ said Rob Durrant-Walker, tax partner at UHY Hacker.

He suggested the increased delays in CT refunds may be due in part to the Revenue’s recent change to the way with which it deals with the tax, centralising the process into a small number of large regional offices.

‘Claims are no longer processed at the nearest local tax office. For example, all... claims in York used to be dealt with in the York tax office but are now processed in Nottingham, along with claims from several other regions.

‘The huge rise in businesses posting losses… has lead to a sharp increase in… repayment claims. This has no doubt had an impact on the speed of processing repayments, but these changes to HMRC’s working operations are slowing things down even further,’ said Mr Durrant-Walker.

The Revenue responded to his criticisms by acknowledging that December is the most popular filing date for companies.

‘Consequently, we experience peak volumes in that month,’ said a department spokesperson. ‘Since September, we have asked customers to clearly indicate if a return contains a repayment request. If it does, we prioritise it.’

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