Page last updated at 09:56 GMT, Friday, 23 May 2008 10:56 UK

Glitch hits workers' tax refunds

Sue Hitchcock
Sue Hitchcock says the problem is threatening her business

A software glitch on the HM Revenue & Customs (HMRC) website has left some taxpayers waiting for tax refunds for nearly a month.

The problem lies with a single box on the online tax return form, which asks accountants to name their own bank account to receive a client's refund.

The fault mistakenly rejects any entry, but has not been fixed since 30 April.

As a result the entire tax return is rejected and taxpayers can neither pay tax nor claim any refunds they are due.

Tax relief

The problem has been highlighted by an accountant from Kent, Sue Hitchcock, who has been in business for six years and prepares tax returns for about 700 clients working in the construction industry.

Her firm, Sub-Tax, specialises in obtaining tax relief for their business travel as they move around the country from one building or construction site to another.

As a result they are able to get tax refunds ranging between 600 and 3,000 a year.

She says 40 of her customers are owed 100,000 between them and her own business is under threat as she is not being paid by these clients until they get their refunds.

"I'm extremely cheesed off, it is disgraceful," she said.

"It is a minor error in a text box - my 16-year-old son could probably sort it out.

"We have sent numerous e-mails, letters and faxes, and have made telephone calls, and have had no response from the Revenue," she added.

Urgent issue

The Revenue said it was sorry.

HMRC web site
The latest warning on the HMRC website

"It's a tiny proportion of online filers who are claiming a rebate payable to a nominee experiencing some difficulties," said a spokesman.

"We are working to restore this problem as soon as possible and no-one will be losing out as a result."

A statement on the HMRC website describes the problem as a "service issue" and says it is being investigated "as a matter of urgency".

Larger accountancy or book keeping firms that use commercial self-assessment software are not affected as the problem lies only with the HMRC's own software.

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