HMRC made us wait a year for £150,000 tax rebate | Money

When my mother died, it took four years to get probate. due to financial difficulties. During this period, my father paid inheritance tax (IHT) on the advice of his solicitor, to prevent interest accruing.

It turned out that the lawyer’s estimate of the amount was extremely incorrect.

My father applied for forgiveness a year ago and eight months later HMRC confirmed he was owed £153,500. Two more months passed without a word. My father is 86 and I wonder if HMRC is hoping he will die before he has to pay.

He used up all his savings and had to sell a field to pay the tax he thought he owed.ed, and this left him very short of money.

C.J., Bristol

If we are 30 days late paying our taxes, HMRC will fine us 5% plus interest on the amount owed. However, when he owes us something, he gives himself as much time as he wants, and that can be up to a year.

Here’s the wonder: three days after raising your father’s case with HMRC, he was called by a real human and the money was paid into his account that afternoon, with accrued interest.

Note that the interest charged by HMRC to taxpayers who procrastinate – as well as the fine – is the Bank of England base rate (now 3.75%) plus 4%. The interest it pays us in the event of delay is 1% lower than the base rate.

HMRC blamed the delay on a “management error”.

“I’ve never heard my father so jubilant,” you say. This has not happened here, but HMRC insists that cases are resolved within 15 working days.

CK, who lives in Spain and works for a British company, had to wait 13 months for HMRC to reimburse him for an overpayment caused, in his case, by his own mistake.

She had wanted to take advantage of last year’s extended deadline to repay her national insurance (NI) and increase her state pension rights. When she tried to pay, she discovered that HMRC had registered her for the much more expensive Class 3 NI contributions instead of Class 2.

“Class 3 would cost me an unaffordable £180,000, compared to £3,000 for class 2,” she wrote.

She alerted HMRC to the confusion and received, after five months of waiting, a calculation still based on class 3 and an order to pay within a week or risk forfeiting the opportunity.

“Panicked about the delay, I emptied my savings to pay the maximum amount possible – over £8,000,” she wrote.

HMRC later admitted it had made a mistake, that she was eligible for the lower Class 2 contributions and should get a refund of £5,094.

It was October 2025, and that was the last she heard of it. When she asked for an update in March, she was told she could expect her refund in November.

“My employer is reducing its workforce by a quarter this year and I used all my savings to pay this overpayment,” she says.

HMRC claims the refund was processed before I questioned its botched filing and is pleased to be so ahead of the estimated November deadline.

In fact, he approved the payment the same day I contacted you and the check reached you three weeks later.

HMRC admits government asked it to get its act together; it recruited hundreds of additional staff to improve response times.

BORN., who lives in Poland, has the opposite problem. He has been trying for a year to make up to £10,000 in voluntary contributions to NI. The forms he submitted were met with silence.

“I was told it was a very small team still dealing with cases from 14 months ago and that I might have to wait up to a year to get a calculation,” he says.

“It seems crazy to have people willing to pour millions into the British ‘pot’ but who don’t have the resources, or the staff, to facilitate the receipt of that money.”

The “vast majority” of contributions are processed within five working days, HMRC unnecessarily tells me.

It blames the delays on a surge in applications before last year’s deadline and has now handed it a calculation and compensation award.

Finally a happy ending…

ME83, who we featured in January, this week received £63,872 in overpaid tax she claimed for in April last year. It was five months later that I raised his case with HMRC.

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