Why Is There a U.K. Tax Rebate Delay?

It’s a fact: People hate waiting. Google has reported that website visitors’ bounce rate increases to 23% after waiting 3 seconds for a page to load and by 123% as page load times rise to 10 seconds.

Unfortunately, the wait time for a tax rebate is much longer. Like it or not, most people wait 6–12 weeks for a tax rebate.

But some factors can make the wait even longer, like missing information or when you submit your claim with regard to tax deadlines. Let’s take look at possible reasons for a delayed tax rebate and what you can do about it so you avoid screaming, ‘Where’s my tax refund?!’ next year.

How Long Does a Rebate Normally Take?

After you pay tax, you may be owed a tax rebate from HMRC for a number of reasons. If you’re an employee and are paying tax through pay as you earn (PAYE), your figure may have been calculated incorrectly and you overpaid tax.

If you’re self-employed and complete a self-assessment tax return each year, it’s possible this may have errors. These errors may have resulted in you paying more tax than you needed to. Whatever the reason, there’s no doubt you’ll be wondering how long your tax rebate will take before the money lands in your bank account.

It’s difficult to answer this question exactly, as the time it usually takes HMRC to complete a tax refund depends on their current processing times. In most cases, it takes 8–12 weeks. This can vary on the type of rebate you’re after too. Here’s an overview of things you might want a rebate for and their typical wait times:

• Uniform tax refund: 6–12 weeks
• Flat rate expenses rebate: 6–12 weeks
• Professional fees refund: 6–12 weeks
• Mileage claims: up to 12 weeks
• Left or leaving the U.K. tax back: 6–12 weeks
• Tool tax back: 12–24 weeks

Reasons for a Delay

If your tax refund is taking longer than the averages above, there may be several reasons why.

Missing Information

Any missing information from your tax refund claim form means HMRC are going to have to add to the time it takes to process your rebate. This is because they’ll have to contact you in order track down key missing personal data, which might include your:

• P45
• P60
• ID, such as a passport
• Tax credit payment details

You can help speed up this process by making sure you provide all the information HMRC asks for when submitting your rebate application.

Deadlines

You may find your tax rebate takes longer to process if you submit your claim at certain times of the year. HMRC has several key dates to work around during the tax year, including:

• 31 January for processing online self-assessment tax returns and collecting any tax owed
• 6 April is the beginning of the new tax year, and HMRC will be contacting many people to tell them if they need to complete a Self Assessment
• 31 July for the second payment on account, where people pay a contribution towards next year’s tax bill
• 31 October for processing paper self-assessment tax returns

For the above reasons, it’s a good idea to avoid submitting your claim online around these times.

Covid-19 and Brexit

HMRC administered the government’s economic support for taxpayers throughout the COVID-19 pandemic. This support is designed to keep businesses and individuals going. While most of these measures are now expired, they put a strain on HMRC to administer, and staff may still be catching up with a backlog of tasks that were put on hold, including tax rebates and tax investigations.

Brexit also had an impact on the speed at which tax rebates were processed. After Britain left the European Union, businesses outside the U.K. had new filing requirements. For example, HMRC saw a drastic increase in the number of VAT registrations and had to prioritise these kinds of tasks over day-to-day activities, like processing tax rebates.

Happily, the bottlenecks due to Covid and Brexit seem to be subsiding. The HMRC showed much faster responses in 2023, reporting an average of 74% of correspondence with a turnaround of 15 days or fewer, as opposed to just 41% in 2021.

Speed Up Your Tax Rebate Claim

Once your tax rebate application has been submitted to HMRC, there’s not a whole lot you can do to speed up the process. It’s now entirely in their hands.

But there are things you can do prior to submitting your rebate application to HMRC, which may help them to get through your application a little bit quicker. This includes:

• Make sure you have all the necessary information and paperwork ready to send to HMRC so they don’t need to contact you to collect any missing details
• Avoid sending your rebate application during busy periods for HMRC, such as the Self Assessment deadline at the end of January or the start of the new tax year on 6 April
• Remember that smaller amounts—usually less than £1,000—may be processed more quickly than larger amounts, as the latter will require HMRC to make more checks

Conclusion

Waiting for a tax refund can be an inconvenience for a small business or sole trader. Unfortunately, there’s not much you can do to affect the speed at which your claim is processed once you’ve submitted it.

Remember that delays don’t mean HMRC staff don’t understand how important that tax rebate is to you and your business. Help yourself and HMRC staff by making sure your rebate claim has all the information they ask for. This will stop them from needing to contact you for extra information. And avoid sending your return at busy times of the year, such as the Self Assessment deadlines at the end of January and October and the start of the tax year at the beginning of April.

This post was updated in January 2024.