Thousands of taxpayers across the UK are being forced to wait more than a year to receive money owed to them by HM Revenue and Customs, with some individuals having to take out loans to cover their living expenses.
Mounting Backlogs and Personal Hardship
An investigation has revealed that refunds for overpaid income tax and National Insurance contributions (NICs), which were once processed in weeks, are now taking 10 months or longer in many cases. The Institute of Chartered Accountants in England and Wales (ICAEW) has pointed to 'significant backlogs' within HMRC, which are negatively impacting both businesses and individuals.
Lindsey Wicks, a senior technical manager at the ICAEW, stated that HMRC's own service updates show the tax authority is still processing repayments for tax from employment or pensions dating back to January 2025. Self-assessment repayments for requests made in March 2025 are also in the queue.
The human cost of these delays is stark. A self-employed construction worker, Simon Hughes, said he and his wife cannot afford their honeymoon until he receives a £4,550 rebate he claimed in April last year. He was reportedly told he might have to wait until July 2026.
Pensioners Abroad and Multiple Job Holders Hit Hard
The problem is particularly acute for British pensioners living overseas and people with more than one job. Jill Eden, an 83-year-old living in the Netherlands, had to borrow money while waiting for a £48,000 rebate claimed under a double taxation treaty after her husband's death.
"I am 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," she said.
Similarly, Jane Leigh in France is still waiting for a £78,000 refund approved in September, seven months after her claim. She has been repeatedly told a cheque was sent, but it has never arrived.
Employees overpaying National Insurance due to multiple roles are also facing long waits. Kabir Das, who works across NHS departments, was told his claim would not be processed until this September, a significant delay. University professor Linda Ashcombe, who holds two roles, is waiting for a £1,000 refund requested last April, after 15 years of receiving refunds within six weeks.
HMRC Response and Compensation Disparity
HMRC has acknowledged the delays and stated it is investing £500 million in digital services to speed up refunds and help customers pay the correct tax upfront. Following contact from the media, most of the cases highlighted have now received their refunds.
However, a notable disparity exists in how late payments are treated. While taxpayers face stiff penalties and interest (Bank of England base rate plus 4%) for late payments to HMRC, the revenue body only pays interest at 1% below the base rate when it misses its own deadlines.
The ICAEW has urged HMRC to focus efforts on clearing the old backlog rather than prioritising response targets for new correspondence. For now, many taxpayers are left in financial limbo, awaiting money that is rightfully theirs.
