Professional bodies say the problem is widespread
Taxpayers are being left waiting up to a year, and in some cases longer, for money they are owed by HMRC, with some forced to borrow cash to get by.
Refunds which once took a matter of weeks are now taking 10 months or more, with HMRC grappling with what experts describe as “significant backlogs”.
In the starkest cases, people are waiting more than a year for overpaid tax and national insurance contributions (NICs) to be returned.
One self-employed construction worker said he and his wife had to put their honeymoon on hold while they wait for £4,550 of overpaid tax claimed back in April last year.
“The last time I contacted HMRC, it said I could be waiting until July 2026,” he told Guardian Money. “When people owe it money, they get fined for late payment, but when it owes money, it can take as long as it likes without penalty.”
Professional bodies say the problem is widespread (Image: Getty)
Professional bodies say the problem is widespread. The Institute of Chartered Accountants in England and Wales (ICAEW) warned that “significant backlogs” are hurting both businesses and individuals, with HMRC prioritising new claims while older ones are left languishing.
HMRC’s own service updates show that some employment and pension tax repayment claims dating back to January 2025 are still being processed.
Lindsey Wicks, an ICAEW senior technical manager responsible for tax policy, said: “Self-assessment repayments are still being processed for requests made in March 2025.
“Efforts should be focused on clearing the old backlog, rather than responding to new correspondence.”
The delays have proved devastating for some pensioners living abroad. One 83-year-old British pensioner in the Netherlands, said she had to borrow money while waiting for a £48,000 rebate.
“I pay Dutch tax on my pension and, since my husband died two years ago, HMRC has also taxed it at the rate of £2,100 a month,” she told Guardian Money.
“I submitted a refund claim in April under the double taxation treaty and was told it would be dealt with by October, but I’ve heard nothing, and it’s impossible to contact it by phone. I am 83 and wondering if HMRC thinks my age is to its advantage because, once I die, it will be able to hang on to this money for years.”
Another expat, in France, said she is still waiting for a £78,000 refund after cashing in her UK pension. Although she was told the repayment had been approved in September – seven months after she submitted her claim – the money has yet to arrive.
The contrast with how HMRC treats taxpayers who fall behind could not be starker. Late payers are charged interest at the Bank of England base rate plus 4% – currently 7.75% – while HMRC pays interest at 1% below the base rate when it misses its own deadlines.
Problems are also hitting employees with more than one job. Kabir Das, who works across different NHS departments, said he expected a NIC refund last April but has now been told it will not be processed until September.
HMRC said it would investigate the cases. A spokesperson said: “We receive millions of tax refund claims every year, and the vast majority are paid promptly, but we apologise to those experiencing a delay.
“We’re committed to cutting wait times and are investing £500m in digital services to speed up refunds as well as help customers pay the right tax first time so fewer refunds are necessary.”
