HMRC is facing mounting criticism over long delays in processing tax refunds. In cases, individuals and businesses have been waiting more than four months to receive their money. This marks a sharp increase from the previous average of four to six weeks. For small businesses, these delays are creating serious cash flow issues at a time when every pound counts.
The backlog is most severe in cases involving the PAYE (Pay As You Earn) system and the Construction Industry Scheme (CIS). Many contractors and subcontractors in the construction sector have reported large sums help up for months.
Mounting Frustrations
These delays come as HMRC faces wider complaints about is service standards. Average call waiting times now exceed 23 minutes, and many taxpayers say they cannot resolve issues in one call. MPs have also voiced concerns about the increasing complexity of the tax system, which adds more obstacles for both taxpayers and accountants.
Industrial Actions Adds to HMRC Delays
Industrial action among HMRC staff working on PAYE and CIS cases has added to the backlog. HMRC has advised taxpayers to use its online tool to check expected response times and to avoid sending additional details during strikes. Until normal operations resume, there will be no staff available to process these cases.
Closure of the Free Filing Service
Frustrations have grown further with HMRC’s decision to close its free online filing service for Corporation Tax by March 2026. From April 2026, businesses will need to use commercial software to file returns. HMRC says the current service outdates the better commercial options now available. Critics argue the change will increase costs for small businesses and remove a simple, free option.
HMRC is facing mounting criticism over long delays in processing tax refunds. In cases, individuals and businesses have been waiting more than four months to receive their money.
What HMRC Says About the Delays
HMRC insists it is working to improve response times by assigning more staff to clear the backlog. It claims that they process most refunds without extended delays and that customer satisfaction remains near 80%. It also highlights new funding to help meet service standards in 2025/26.
However, performance data for 2024/25 shows HMRC missed most of its key service targets. While they achieved their compliance targets, targets for clearing correspondence and answering calls on time fell short.
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