Tax assessment backlog costs States nearly an extra £150k
THE ongoing backlog of income tax assessments meant the States paid out nearly £200,000 in 'interest' on delayed refunds, more than at any time in the past nine years.
£195,143 was paid out in 2021, nearly £150,000 more than on the previous year.
Under the law, any repayment of tax not made within a year of a return being submitted is subject to a supplement of 5%.
Repayment supplements jumped by 320% from 2020 to 2021 as Revenue Service has grappled with a backlog.
The figures were released in reply to Rule 14 questions from Deputy Gavin St Pier.
He submitted them a week after Revenue Service acknowledged the backlog of outstanding tax returns which need to be assessed, and announced that it was seeking to engage former staff and local accountants to help clear it.
The Revenue Service stated on 13 January that 93% of personal returns from 2018 had been assessed, as had 68% of 2019’s. Numbers for 2020 cannot be reported as the deadline has not passed.
The five-part question sought information on multiple facets of the Revenue Service, including how frequently Policy & Resources receives data on the workflow and backlogs; the information to give an understanding of the scale of the backlog; the cost and scale of overdue tax refunds as regards the 5% repayment supplement; and the estimated and budgeted cost of engaging former staff and local accountants to assist with the current backlog.
The questions were answered by in detail by P&R president Peter Ferbrache, who made clear that Revenue Service had published data about personal returns from 2018 and 2019 as part of the public statement in January. However, the service intends to update and publish figures on a quarterly basis.
As regards the real and estimated costs of recruiting extra help, Deputy Ferbrache said the service’s 2021 pay costs were £640,000 lower than budgeted due to recruitment challenges since the start of the pandemic.
‘The committee has approved additional funding of up to £300,000 from the Budget Reserve to tackle the backlog of returns to be processed, although funding will initially come from any capacity within the Revenue Service budget that arises from vacancies,’ he said.
P&R receives a monthly financial report from Revenue Service, which includes details of revenue collections and operations.
n The deadline for submitting 2020 returns is 28 February and they can be done online through a MyGov account.
