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Refunds getting slower, say accountants

03 April 2012
Categories: News , Admin
'Axing of interest most likely reason'

HMRC are increasingly tardy when it comes to making tax repayments, needlessly putting individuals and businesses under financial pressure, accountants have warned.

They have raised concerns about lengthening delays to tax refunds over the past few years, and they say the hold-ups continue to worsen, exacerbating cash flow problems for taxpayers.

More than two-thirds (67.3%) of accountants who took part in a survey by the publisher Bloomsbury Professional complained about a declining process that is seeing rebates take months to be issued, instead of the weeks that were historically the case.

The current situation is most likely a result of the axing in January 2009 of taxpayers’ entitlement to interest on tax owed to them by the Revenue, giving the department ‘an incentive to drag its heels’, claimed Bloomsbury Professional’s MD, Martin Casimir.

He said, ‘The amounts involved can be substantial… Businesses have been known to get into financial difficulty, or even go bust, while waiting for a tax rebate.’

Accountants were also asked about the areas of returns that attracted the most enquiries from the taxman over the past 12 months.

The most popular response was business profits/losses (27.3%), followed by VAT (20.5%), and then capital gains and employee expenses/benefits (both 18.2%).

‘HMRC are clearly paying close attention to profit and loss accounts to identify whether losses are artificial or inflated,’ said Martin Casimir, adding that, as a lot of small businesses continue to find themselves struggling as a result of the recession, the incentive not to account for the full amount of VAT is ‘greater than ever’.

Categories: News , Admin
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