Delays in processing paperwork at HM Revenue & Customs (HMRC)  are slowing down vital refund payments to businesses, says PKF accountants and business advisers.

HMRC makes security checks on 10% of tax refund claims to ensure they are not fraudulent. Where a claim does not pass the initial test, it is transferred to a new specialist unit in Bristol to investigate further without telling the taxpayer. This special unit only accepts written communications so, once a case is referred there, there is no way to speed up the process or find out why a refund has not been made. In PKF’s experience across the country, the involvement of the new unit adds at least a month to the refund process.

Peter Harrup, tax partner at PKF, says, ”This two stage process can make the wait for a tax refund even longer – struggling taxpayers are having to wait months for their refunds. Clearly, HMRC have to check that claims are genuine, but officers should keep taxpayers informed of what is going on and keep delays for small businesses to an absolute minimum.

 â€œThere is a sharp contrast here with the Government’s statements on ‘Prompt payment’ to suppliers: it aims to pay suppliers within 10 days and promises to pay within 30 days. The circumstances may be a little different, but the impact of a delay on a struggling business can be just the same – a cashflow crisis.