TaxationWeb's Mark McLaughlin recounts another woeful tale of HMRC holding on to taxpayers' money - only this time, it's personal.
At the start of 2014, I received a letter from HM Revenue & Customs (HMRC) about an overpayment which had arisen on my company's PAYE scheme for 2012/13. The letter broadly pointed out the overpayment and requested an explanation of why it had arisen before HMRC would repay it.
I checked the records for the PAYE scheme (there are two employees, including me). The overpayment pointed out by HMRC was indeed correct. It arose because of a change in my tax coding towards the end of 2012/13, which generated a large tax overpayment. I had assumed at the time that HMRC would repay the overpayment shortly after the year end.
I replied to HMRC's letter with the explanation of the overpayment which they had requested, together with documentary evidence.
Time went by, and no repayment was received. Eventually, on 21 March 2014, I resorted to ringing HMRC's employer helpline. I was told that the repayment was being issued that day, and a cheque should arrive by 11 April. It didn't arrive, so I rang HMRC again on 23 April. I was told that no cheque had been issued, and that the overpayment had been reallocated against 2014/15! I pointed out that the monthly PAYE amounts for 2014/15 were small, and probably insufficient to offset against the overpayment. The HMRC officer therefore requested authorisation from another HMRC department for a repayment to be issued. I was told that a cheque would arrive by 6 June.
No HMRC cheque arrived, so on 13 June, I rang HMRC again (bear in mind that would be waiting in HMRC's employer helpline queue for 20-30 minutes prior to each conversation). This time, I was told that the matter had been passed to another HMRC department, but nothing had been done. The HMRC officer apologised, and said that he would contact the other department to request that they issue the cheque, or contact me with any queries. However, I was advised to ring HMRC again on 23 June, if I don't hear from them!
Can you imagine if I had owed HMRC tax for 2012/13? I would have been faced with penalties, interest and probably a hard time from HMRC's tax collectors. But HMRC owe me money. What can I do about it? Not a lot.
The moral of this story? Don't allow yourself to get into a position where HMRC owe you money, if you can help it. Otherwise, in my experience (and I imagine that my experience is not unique), you are likely to suffer.
Best wishes,
Mark McLaughlin
Managing Editor
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