The first tax returns to be submitted in the tax return season are normally those which are likely to generate tax refunds for taxpayers who really need to money. However, the tax may not be repaid in the manner requested, due to HMRC’s policy regarding credit and debit cards.
Where the most recent tax payment was made by a credit card, the tax refund will be made to the same card, even if that card is not held in the taxpayer’s name. This is in line with banking industry standards for making refunds, for example when returning purchased goods to a shop.
The tax refund will be directed to the card only if tax has been paid using that card within the last nine months. Also, the total value of the tax refunds (if more than one) cannot exceed the amount of tax paid with the card.
Where the taxpayer has requested that the tax is refunded into his bank account, that request will be ignored by HMRC if the conditions for a repayment to a credit or debit card are met. This means that where the taxpayer has an outstanding debt on their credit card the tax refund will be set against the amount outstanding, and won’t be available to be spent on other things.
For further details please contact DFC Accountants in Cardiff, Wales.