A growing backlog at HM Revenue and Customs (HMRC) has led to long delays in processing tax refunds, with some individuals waiting as long as 10 months, or even longer. Once a process that was completed in weeks, refunds for overpaid tax and National Insurance Contributions (NICs) are now being pushed into the months-long waiting game.
Taxpayers across the UK, including self-employed workers and pensioners, are being left financially strained while HMRC works to clear the mounting backlog. With some of the most affected individuals already waiting for over a year, frustration is mounting as people rely on these refunds to cover everyday expenses. Experts have called on HMRC to shift focus from new claims to clearing the older backlog.
The Scale of Delays and the Impact on Taxpayers
The scale of delays is striking, with some taxpayers waiting months or even years to receive the refunds they are owed. Once processed in a matter of weeks, repayments are now taking an alarming 10 months or more, especially as HMRC prioritizes new claims over those that have been lingering in the system.
A self-employed construction worker, who requested a refund of £4,550 overpaid tax back in April 2025, shared how he and his wife had to put their honeymoon plans on hold while awaiting their funds.
“The last time I contacted HMRC, they said I could be waiting until July 2026,” he stated, highlighting the stark contrast between HMRC’s delay in repaying owed funds and the penalties it imposes on taxpayers who fall behind in payments.
Widespread Impact: Professional Bodies Weigh In
The delay is not an isolated issue, but a widespread problem that is affecting businesses and individuals alike. The Institute of Chartered Accountants in England and Wales (ICAEW) has raised alarms about the ongoing backlogs, calling the situation “significant” and a drain on both business and personal finances.
The ICAEW’s senior technical manager, Lindsey Wicks, stressed that older claims should be prioritized over new requests. “Self-assessment repayments are still being processed for requests made as far back as March 2025. Efforts should be focused on clearing the old backlog,” she said, emphasizing the importance of a more targeted approach to clear up the mounting delays.
Expatriates in Financial Distress
The delay in refunds is particularly troubling for pensioners and expatriates who rely on timely payments for their financial stability. One British pensioner, 83 years old, living in the Netherlands, shared her frustration at waiting for a £48,000 rebate. After submitting her claim under a double taxation treaty in April, she was promised repayment by October 2025.
However, she has yet to receive any update and finds it increasingly difficult to contact HMRC. “I’m 83 and I wonder if HMRC thinks my age is to its advantage because, once I die, they’ll be able to hang on to this money for years,” she remarked.
Another expatriate in France, who has been waiting for a £78,000 refund since September, expressed similar dismay, adding to the growing sense of dissatisfaction with the delay.
A Stark Contrast in Treatment: HMRC vs Taxpayers
The contrast between how HMRC treats taxpayers who owe it money and those waiting for refunds is becoming increasingly stark. While taxpayers are charged interest at the Bank of England base rate plus 4% currently 7.75% when they miss deadlines, HMRC itself only pays interest at 1% below the base rate when it misses its own deadlines.
This discrepancy has led to calls for more accountability and a fairer approach to handling refunds, especially when taxpayers’ financial well-being is on the line.
The Impact on Employees with Multiple Jobs
Another group affected by the backlog is employees working multiple jobs. Kabir Das, an NHS worker, shared his frustration at not receiving a National Insurance Contributions (NIC) refund due in April. After being told his refund would be processed by September, he now faces additional financial strain.
“It’s a huge inconvenience,” he said, pointing out how the delays are not only affecting self-employed workers but employees with complex tax situations as well. Many are now facing increased uncertainty, as the backlog shows no signs of letting up.
HMRC's Response and Future Efforts
In response to these mounting concerns, HMRC has pledged to investigate individual cases and expedite refunds. A spokesperson for the tax authority acknowledged the problem, saying: “We receive millions of tax refund claims every year, and the vast majority are paid promptly, but we apologise to those experiencing a delay.”
HMRC further committed to reducing wait times by investing £500 million in digital services aimed at speeding up refunds and reducing the number of claims requiring repayment. However, many remain skeptical of these promises, particularly given the significant delays already experienced.
Final Summary:
Taxpayers across the UK are facing substantial delays in receiving refunds from HMRC, with some waiting over a year for money they are owed. The backlog is widespread, affecting businesses, individuals, and pensioners alike, while HMRC struggles to manage the increasing number of claims. Efforts to clear the backlog are ongoing, but many individuals are now in financial distress due to the delays.
