HMRC explains 10-day rule for when payments land in bank accounts

HMRC has set out the rules for when tax refund payments should arrive in bank accounts.

A taxpayer contacted the authority - which collects taxes in the UK - over social media as they were due a rebate. They messaged the group on Friday, July 25 saying the refund was allegedly sent out on July 13 but had yet to arrive.

HMRC initially told the person: "It normally takes 10 working days to process. We do select repayments for extra security checks. Currently it can take up to 6 weeks to receive the refund."

The tax body also asked the person if the payment status on their online statement was still showing 'pending'.

The person responded the next day (Saturday, July 26) to say it was not marked as pending but rather it said the refund had been paid on July 13 and yet it still hadn't arrived.

HMRC said in response: "It can take 10 working days, which excludes Saturday and Sunday, so I'd expect it to be in your bank by Monday."

If you think you are owed a refund from HMRC, you can find out how to claim your cash back using a tool on the Government website.

The Government website also has a tool you can use to check how long it will take for you to get a response from HMRC if you have contacted them about an issue.

If you have paid too much or too little tax by the end of the tax year, which ends on April 5, HMRC will either send you a tax calculation letter, known as a P800, or you will be sent a simple assessment letter. These letters go out between June and March of the following tax year.

You will only be sent this leter if you are employed or receiving a pension. If you are registered for self assessment, your bill will be automatically adjusted if you have underpaid or overpaid tax.

HMRC increased the late payment interest rate to 8.5 percent, from April 6. Charlene Young, senior pensions and savings expert at AJ Bell, explained how the limit for the rate is set.

She said: "In her October Budget, the Chancellor gave the green light for HMRC to up the interest penalty that can be charged from the Bank of England's base rate plus 2.5 percent to the base rate plus 4 percent, meaning it stands at 8.5 percent from April 6, 2025.

"In contrast, HMRC will continue to only pay base rate minus 1 percent on repayments owed to taxpayers, equivalent to 3.5 percent. HMRC can still also give themselves more time to pay compared to taxpayers.

"That's because late interest is chargeable immediately, yet the repayment supplement only kicks in if HMRC are a year late."