HMRC's Slow Dance: The Cost of Waiting

HMRC's Slow Dance: The Cost of Waiting

In the world of finance and business, few things are as crucial as timing and precision. When it comes to 'Loans to Traders' claims, the importance of these factors are magnified. These claims are a lifeline for loaners who have faced financial setbacks, offering a potential avenue for irredeemable loan recovery on businesses that have faltered. In such situations, the loan can be treated as an allowable loss and substantial repayments of tax can potentially be recovered.

However, the process of securing such claims, like many others, can be fraught with complexities, delays, and frustrations, particularly when dealing with His Majesty's Revenue and Customs (HMRC).

The business perspective

For business owners such delays can be frustrating. One client we’re working with is currently facing delays in their approval of their ‘Loans to Traders’ claim, following a substantial loss resulting from a venture which was severely impacted by the pandemic, forcing them to cease trading.

Identifying an opportunity to recover some of the investment through a ‘Loans to Traders’ claim, a claim was submitted to HMRC early 2023. Whilst HMRC have acknowledged receipt of the claim, they are yet to consider it. Despite several regular telephone calls to chase progress, the claim has remained with their team for months, with each follow-up resulting in another 30-day timeline estimate. The cycle repeats, and the client's patience wears thin.

HMRC’s challenge

HMRC plays a pivotal role in handling claims, but it's common for individuals to encounter delays. This can be a source of frustration for both parties, as HMRC sometimes finds it challenging to keep up with the influx of requests. Factors such as reduced staffing levels and a heavy reliance on outdated IT systems, which lack the agility needed for the contemporary business landscape, contribute to the accumulation of backlogs within the system. This, in turn, leads to frustration for business owners trying to navigate everyday operations.

The cost of delays

The backlog in HMRC's system leads to sluggish response times, directly affecting business owners at the core of their operations. In our client's situation, what was initially projected as a 30-day resolution estimate has now stretched into a series of repeatedly deferred timelines for their 'Loans to Traders' claim. Given the potential repayment surpassing £100k, this sum could be utilised for further reinvestment or in some business cases, the paying of essential bills.

The case study we’ve discussed underscores the challenges faced by many in similar situations. In the world of finance and business, time is money, and delays in processing claims can have cascading effects on all stakeholders involved – including the reputation of HMRC.

As we progress, we remain committed to ensuring the best possible outcomes for the mentioned client and all businesses we work with. We recognise that delays with HMRC can be frustrating, and we will consistently explore all possible avenues to resolve open claims whilst recognising the constraints of HMRC.