HM Revenue & Customs tax payment and refund changes

HMRC are to introduce a new system for processing tax refunds which could lead to lengthy delays in receiving repayments.

At the moment, if you make a Self Assessment tax payment to HMRC you are likely to pay by BACS, debit or credit card. If you are then subsequently entitled to a refund, as perhaps you paid too much on account, the new rules mean that HMRC will ONLY make the refund to the account that was used to pay the tax bill. This will supersede any details provided on the Self Assessment form.

This is likely to cause chaos and could lead to misplaced repayments or even no repayments at all, particularly where the payment has been made from an account which has been closed or a card which has expired! The obligation to contact HMRC in respect of the missing refund then falls onto the taxpayer, which is likely to lengthen the time between making a repayment claim and receiving the repayment.

In addition, HMRC are switching banks from Citibank and RBS to Barclays. The new arrangements will begin in February 2016 but most taxpayers paying their bills electronically will be unaffected. Further details will be published by HMRC in February 2016 and we will of course provide a further update at that time.

If you wish to speak to one of our tax team then for Darlington call Alan Moore or Lee Watson (01325 349700), for Durham call Nicola Bellerby or Lee Watson (0191 384 2244) and for York call Alan Moore or Graham Richardson (01904 784400).