The deadline for online tax returns falls on January 31 2023, and with under three months left, HM Revenue and Customs (HMRC) is encouraging Brits to plan ahead to ensure they complete the process on time. However, new proprietary data from Tommys Tax, the UK’s leading tax-refund app, found that amidst record inflation and soaring prices, almost half (46%) of the nation’s PAYE workers are still unaware that they are eligible for a tax refund. Although households are already struggling to keep up with mortgage prices, energy bills and food spending, this is set to become even more challenging as we approach the winter months with a recent report from Cornwall Insight revealing households could be faced with an average annual energy bill of £4,255 in Q1 2023.
In light of this, experts are now warning that there could be a spike in the number of taxpayers looking to claim back their returns this year, especially because in the current climate, the average tax refund amount of £1,518 could serve as a critical lifeline for families across the board. However, HMRC is already coming under relentless pressure from taxpayers after the number of abandoned calls doubled from 300,000 to 600,000 since 2017, according to research. The Revenue is currently struggling to keep up with the rush of calls in the past few months, largely due to the chaos caused by the recent tax cut U-turns. Hence, this marks a crucial period for Brits to ensure that they are prepared for the deadline by beginning to educate themselves around the tax refund process.
Landmark research from Tommys Tax indicates that a majority of the population are still uninformed on the process, with over a third (36%) of Brits stating that it is the one topic they understand least. The same study found that half of Brits would welcome any form of refund, with the cost-of-living crisis crippling their personal finances, while just over a quarter are already struggling to make ends meet for their basic needs – yet haven’t even started to think about their tax refund.
Key stats:
46% of PAYE workers didn’t think they were eligible for a tax refund, and have no idea how to go about it if they were
50% of Brits state that any kind of refund would be a lifesaver with the cost-of-living crisis crippling their personal finances
26% of Brits are already struggling to make ends meet for their basic needs, and haven’t even started to think about their tax refund
21% of Brits state that tax is their biggest financial burden which they are least prepared for
The Bank of England’s (BoE) interest rate rise last week to 3% prompted even more concern amongst Brits in the current climate. A recent study found callers with tax queries are now waiting four times as long to get through to HMRC compared to five years ago. Prior to the pandemic, only 15% of customers were waiting more than ten minutes to speak to a HMRC adviser – now, 1-in-5 callers are simply giving up due to the long wait times.
There is a clear desire for Brits to seek assistance following the chaos arising in the past month – however, there are also a rising number of unregulated, non HMRC registered firms who charge enormous fees for tax refunds – sometimes even up to 48% of the refund amount. HMRC estimates that around 500,000 people fall victim to these scams every year, which given the current living squeeze, could be extremely harmful to families who are already scrambling to make ends meet.
With this in mind, Tommys Tax aims to bridge the disconnect between Britain’s population and the tax industry. The HMRC registered tax refund app was founded in 2015 by Tommy Mcnally, after he noticed the lack of tax knowledge and support for CIS workers. This has since grown to cover a wide variety of employment sectors, with the business now focusing primarily on CIS, PAYE and self-employed individuals. The app not only assists people with their tax returns, but also educates them and ultimately ensures they’re claiming what’s rightfully theirs. Tommy’s Tax has grown to support over 150,000 clients across the UK and have filed 200,000+ returns, helping to claim more than £50 million in tax refunds in just under a decade.
Tommy Mcnally, leading tax expert and CEO of Tommys Tax comments:
“Now more than ever, Brits will be looking at tax refunds as a means to cope with the cost-of-living crisis, and for a majority, this could inject a much-needed boost into their bank accounts. However, our research shows that there is still an obvious lack of knowledge when it comes to the process – which is worrying given that the average tax refund for a PAYE worker stands at a staggering £1,518.
“With so many unregistered agents out there, as well as the current delays through HMRC, I’m sure that many people are wondering whether they’ll be able to claim their rebates back in time – that is why we’re here to help with the entire process for workers across the country. One of the ways we help is by educating customers about the various tax rebates that people are eligible for, but don’t make use of and that is where we’re here to help. Taxes can be boring, confusing and anxiety-inducing, but if done right could make a real difference to people’s lives.”
