Is there an issue with HMRC tax refunds?

HMRC has come under fire again this month, this time over reports that some tax refunds were taking longer than usual to be processed.

The tax agency is facing continued pressure to improve the service it offers taxpayers, amid reports of unanswered phone calls and poor customer service.

Here, Which? explains the problems taxpayers are facing and looks at the easiest ways to contact HMRC. 

What's going on with HMRC tax refunds? 

The issue was flagged earlier this month by Nikki Ainscough, managing director of York-based Equilibrium Accountants, who reported that some of her clients had been advised to wait more than four months for refunds that used to take around four to six weeks to process.

In one case, HMRC told her that she could expect a reply in August to a request submitted in March. 

The worst delays seem to affect employers’ PAYE bills and the Construction Industry Scheme (CIS). The CIS is a scheme that applies if you work for a contractor in construction on a self-employed basis. If you fall under this scheme, the contractor must withhold tax on its payment to you, meaning you may end up overpaying if you're on a low income or claim tax relief on trade expenses.

It is understood that some of the staff working on PAYE and CIS refunds have been taking part in industrial action. 

HMRC wasn't able to provide an estimate of how many people have been affected by the delays, but has confirmed that self-assessment refunds have not been impacted by industrial action.

What does HMRC say?

HMRC told Which?: 'We’re tackling response times for these refund claims by allocating extra staff to work on them. 

'We’ve made significant improvements to our customer service overall. Customer satisfaction stands at around 80% and the funding settlement we’ve received means we’ll be able to meet our service standards in 2025-26.'

Why might you be owed a tax refund?

You'll be owed a tax refund if you've paid too much tax. 

There are a few common instances where this might happen, including starting a new job and being on the incorrect tax code, receiving a redundancy payment and only working for part of the tax year.

How to claim a tax refund

In many instances, HMRC calculates overpaid tax automatically and sends a P800 form to explain how to claim that money back. These are sent out at the end of the tax year, usually in the summer months.

If this hasn't happened and you think you're owed a refund, you can go through HMRC's step-by-step online process. You'll be asked what you paid too much tax on, before being taken through a series of questions to find out a bit more about your circumstances.

If you've requested a tax refund already, you can use HMRC's Where's My Reply tool to find out how long you can expect to wait.

You'll need to provide some information about your request, including how and when you submitted it. 

The tool will give you a date for when you can expect a reply. It also tells you when the claims that are currently being processed were submitted.

Some refund requests may require additional checks, which can take up to 12 weeks, but most don't.

• Find out more: how to get 100% of your tax refund

HMRC's poor customer service issues

The issue around delayed refunds comes as the tax agency faces continued scrutiny over its customer service record.

The Public Accounts Committee (PAC), the government spending watchdog, has criticised HMRC over its phone and digital services in reports published this year as part of inquiries into customer service and the cost of the tax system.

Putting customers first

In a report published at the end of April, the PAC warned that poor customer service in recent years has eroded taxpayers' trust in HMRC.

The committee highlighted that the proportion of agents who found it easy to deal with tax issues fell from 50% in 2019 to 38% in 2023, and urged the tax agency to work quickly to address the decline in trust.

The watchdog also stressed how many of HMRC's systems are out of date, and urged the tax agency to make sure customers' needs are at the heart of all plans to improve digital services. 

This comes as new research reveals that many aren’t ready for Making Tax Digital: the service, which was introduced for businesses in 2019, requires customers to keep digital records of their accounts and submit quarterly updates to HMRC and will be rolled out to more taxpayers from next year.

• Find out more: Making Tax Digital: 4 questions answered

Poor phone performance

In an earlier report published in January, the PAC accused HMRC of deliberately downgrading its phone services to force customers to seek advice online – an accusation the tax agency says is baseless.

The report stated that HMRC’s phone service reached an ‘all-time low’ in 2023-24, with the tax agency answering 66% of customers’ attempts to speak to an adviser against a target of 85%.

There was also a significant increase in the number of people being cut off after waiting on hold, rising from 6,875 in 2022-23 to more than 43,000 in the first 11 months of 2023-24. 

HMRC cuts off calls without warning when a customer has been waiting more than 70 minutes, as its system can't handle a large number of unanswered calls in the queue.

A freedom of information request by investment platform AJ Bell revealed that while the number of calls answered by HMRC has halved over the past decade, agents are spending a similar amount of hours handling calls, suggesting that the average query now takes longer to resolve.

• Find out more: HMRC under fire for poor customer service

Developing digital services

HMRC estimates that two-thirds of the calls it receives could be resolved online, but the January PAC report highlighted that not all services are available digitally, and in some cases, they don’t provide the reassurance that taxpayers need. 

The watchdog also found that HMRC's processes for interacting with customers are out of date, and that the tax agency should develop secure systems for communicating with customers online. 

In 2022-23, approximately 70% of the correspondence HMRC received came via post.

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How to get in touch with HMRC

If you have a question for HMRC, it's worth considering the contact options available to make sure you receive a response as quickly as possible.

Online

You can use HMRC’s digital assistant to get help with a range of technical enquiries. The online service will direct you to relevant sources of information, or can connect you to a live webchat with an HMRC adviser if necessary.

The HMRC app provides information about your tax, National Insurance and benefits, and you can find general information and guidance on HMRC’s website, including video tutorials and pre-recorded webinars. 

Phone

If you need assistance, you can call HMRC on 0300 200 3300. This can be useful for more complex queries, but be prepared to wait on hold and make sure you have your National Insurance number with you when you phone. 

Post

You can submit queries for a range of tax issues via post, but be aware that this may not be the quickest way to receive a response. You can find the relevant address for your query on the HMRC website.

Extra support

You should be able to get additional help if your health condition or personal circumstances make it difficult to contact HMRC. You can call the HMRC helpline to make a phone or video appointment with the extra support team, or use their webchat service. 

Tax guidance from Which?

Our expert tax guides provide easy-to-understand guidance on a range of personal tax issues, from how to file a tax return to inheritance and capital gains tax.

Which? members who need to do a self-assessment tax return can get a 50% discount with GoSimpleTax: an easy-to-use tool that helps you to work out your tax bill and submit it directly to HMRC.

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