HMRC Industrial Action
- MAZ
- Aug 6
- 14 min read
The Audio Summary of the Key Points of the Article:
What’s Happening with HMRC Industrial Action and How It Hits Your Wallet
Why Are HMRC Staff Striking?
Now, if you’ve been hearing about HMRC staff walking out, you’re not alone. The industrial action, which kicked off in December 2024 and is set to run until 6 June 2025, is a big deal for taxpayers across the UK. Over 30,000 civil servants, including more than 400 HMRC employees, are involved, led by the Public and Commercial Services (PCS) union. The core issue? Pay disputes. Outsourced workers are getting smaller pay rises than in-house staff, and the union’s not having it. HMRC’s response has been to prioritise critical services, but the ripple effects are hitting everyone from sole traders to big businesses.
This isn’t just a workplace squabble—it’s disrupting how taxes are processed. For you, that could mean delays in getting your money back or sorting out tax issues. The strike’s scale is massive, and with thousands of staff involved, HMRC’s capacity is stretched thin.
Which HMRC Services Are Taking the Hit?
So, what’s actually affected? The industrial action is clogging up several key HMRC services, and it’s not just a minor inconvenience. Here’s the rundown:
● Tax Refunds: If you’re waiting for a VAT or income tax refund, you might be twiddling your thumbs longer than usual. Small businesses and charities, who often rely on these refunds for cash flow, are feeling the pinch hardest.
● Construction Industry Scheme (CIS): Subcontractors are facing delays in verification processes, which can lead to over-deductions of tax at source. This means less money in your pocket until HMRC sorts it out.
● Helplines: HMRC’s phone lines, like the Employer Helpline and CIS Helpline, are open from 8am to 6pm, but wait times are brutal—averaging over 23 minutes, with only 63% of calls answered in some cases.
● PAYE Processing: Updates to employee tax codes or expense claims are moving at a snail’s pace, which could mess with your payroll if you’re an employer.
HMRC Service | Disruption Level | Impact on Taxpayers |
Tax Refunds | High | Delayed cash flow, especially for small businesses and charities. |
CIS Processing | High | Over-deductions for subcontractors, reduced take-home pay. |
Helplines | Moderate to High | Long wait times, reduced access to support. |
PAYE Processing | Moderate | Slower updates to tax codes, potential payroll errors. |
This table sums up the chaos. The Public Accounts Committee has even called out HMRC’s phone services as “inadequate,” eroding trust in their ability to manage tax affairs.
How Are These Delays Affecting Your Finances?
Now, let’s get real: these disruptions aren’t just annoying—they can hit your wallet hard. If you’re a small business owner, delayed VAT refunds could mean struggling to pay suppliers or staff. For subcontractors under CIS, over-deductions might leave you short on cash for months. And if you’re self-employed, waiting on an income tax refund could mess with your budgeting.
Take Priya, a freelance graphic designer in Leeds. She overpaid £2,500 in income tax for the 2023/24 tax year and filed for a refund in January 2025. Normally, she’d get it within 6–8 weeks, but with the industrial action, she’s still waiting in May 2025. That’s £2,500 she can’t use for new equipment or marketing. Priya’s not alone—thousands are in the same boat, and the cash flow squeeze is real.
For businesses, the stakes are even higher. Late CIS verifications can lead to 30% tax deductions instead of 20% or 0%, eating into profits. And if you’re relying on HMRC’s helplines to fix a PAYE issue, good luck getting through before your patience runs out.
Why Should You Care About Tax Compliance Now?
Here’s the kicker: HMRC’s disruptions don’t mean you’re off the hook for tax compliance. Deadlines like 31 January 2025 for Self Assessment returns and payments are still looming. Miss them, and you’re looking at a £100 late filing penalty, plus interest at 4% above the Bank of England base rate (up from 2.5% as of 6 April 2025).
The industrial action makes it harder to get help, but HMRC’s not budging on penalties. This puts you in a tricky spot: you need to stay on top of your taxes, but the usual support channels are jammed. For businesses, this could mean hiring accountants to navigate the mess, adding to costs. For individuals, it’s about avoiding overpayments or underpayments that could trigger audits later.
What’s the Bigger Picture?
Now, consider this: the industrial action isn’t just a short-term headache. It’s exposing cracks in HMRC’s service model. With only 76% of customer interactions digital in 2024/25, HMRC’s push for 90% by 2030 feels ambitious when staff are striking. The Public Accounts Committee’s criticism of HMRC’s phone services highlights a deeper issue: underinvestment in customer support. This could erode trust in the tax system, making compliance feel like a battle.
For businesses, the delays are a wake-up call to rethink reliance on HMRC’s timely processing. For taxpayers, it’s a reminder to double-check your records and plan ahead. The next part will dive into how you can dodge these disruptions with digital tools and smart strategies.
Navigating HMRC Industrial Action: Practical Solutions for UK Taxpayers and Businesses
How Can You Use HMRC’s Digital Tools to Stay on Track?
Now, let’s talk about dodging the chaos caused by HMRC’s industrial action. With helplines jammed and refunds delayed, HMRC’s digital services are your best mate right now. The good news? HMRC’s online platforms, like the Business Tax Account and Personal Tax Account, are still running smoothly, even with strikes ongoing until 6 June 2025. These tools let you check your tax status, file returns, and track refunds without waiting on hold for hours.
For individuals, the Personal Tax Account on www.gov.uk/check-income-tax-current-year is a lifesaver. You can view your tax code, estimate your tax bill, or claim refunds directly. Businesses can use the Business Tax Account to manage VAT, PAYE, and CIS tasks. The HMRC app, available for iOS and Android, also lets you check deadlines and payments on the go. In 2024/25, over 1.2 million taxpayers used the app, and it’s a solid backup when phone lines are swamped.
HMRC Digital Tool | Key Features | How It Helps During Industrial Action |
Personal Tax Account | View tax codes, claim refunds, check Self Assessment status | Avoids helpline delays; instant access to tax info |
Business Tax Account | Manage VAT, PAYE, CIS; file returns | Streamlines business tax tasks without HMRC staff |
HMRC App | Track payments, view deadlines, get reminders | Mobile access reduces reliance on call centres |
Where’s My Reply | Check response times for HMRC queries | Estimates delays for letters or refunds |
These tools aren’t perfect, but they’re your first line of defence. Just make sure you’ve got your Government Gateway ID ready to log in.
How Do You Check and Manage Tax Refunds During Strikes?
So, the question is: how do you get your refund when HMRC’s staff are on strike? Delays are hitting income tax and VAT refunds hard, with some waiting times stretching to 12–16 weeks instead of the usual 6–8. Here’s a step-by-step guide to keep your cash flow moving:
Log into Your Personal or Business Tax Account: Use your Government Gateway ID on www.gov.uk/check-income-tax-current-year to check your refund status.
Verify Your Tax Position: For individuals, confirm your tax code and overpayments. For businesses, check VAT or CIS refund claims.
Submit a Refund Claim: If you’ve overpaid, file a claim via the online portal. Use form R38 for income tax or VAT484 for VAT refunds.
Track Progress with Where’s My Reply: Visit www.gov.uk/government/organisations/hm-revenue-customs to use the “Where’s My Reply” tool and get estimated response times.
Set Up Alerts: Use the HMRC app to get notifications on refund progress or deadlines.
Contact HMRC if Urgent: If delays exceed 16 weeks, write to HMRC at Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS. Avoid calling unless critical.
This process helped Ewan, a self-employed plumber in Glasgow, during the 2024/25 tax year. He overpaid £1,800 in income tax and used the Personal Tax Account to file a refund claim in February 2025. By checking “Where’s My Reply,” he saw the delay was 14 weeks but got his money by May without needing to call HMRC. It’s not instant, but it’s better than being stuck on hold.
What Proactive Strategies Can Businesses Use?
Now, consider this: if you’re running a business, waiting for HMRC to sort itself out isn’t an option. The industrial action’s impact on CIS and PAYE processing can mess with your cash flow or payroll. Here are some practical moves to stay ahead:
● File Early: Submit VAT returns or Self Assessment filings well before deadlines (e.g., 31 January 2025 for Self Assessment). Early filing reduces the risk of penalties if HMRC’s processing lags.
● Use Third-Party Software: Tools like Xero or QuickBooks can handle VAT and PAYE calculations, syncing directly with HMRC’s systems. Over 70% of small businesses used such software in 2024, cutting reliance on HMRC’s manual processes.
● Hire an Accountant: For complex issues like CIS verifications, a tax professional can navigate HMRC’s backlog faster than you can alone.
● Build a Cash Buffer: If you rely on VAT refunds, keep a cash reserve to cover 3–4 months of expenses. This saved a Cardiff-based construction firm in 2024 when their £15,000 CIS refund was delayed by 10 weeks.
These steps aren’t just about surviving the strikes—they’re about staying compliant and keeping your business humming.
Can Digital Services Really Replace HMRC’s Helplines?
Be careful! While digital tools are a godsend, they don’t fully replace HMRC’s helplines. Complex queries, like tax disputes or non-standard refund claims, often need human intervention, and that’s where the strikes hurt most. In 2024/25, HMRC’s helpline performance dropped to a 63% call answer rate, with wait times averaging 23 minutes. If you must call, try early mornings (8–9am) when lines are quieter.
For simpler tasks, stick to digital. Ayesha, a Manchester-based café owner, used the Business Tax Account to update her PAYE records in March 2025 when an employee’s tax code was wrong. It took 10 minutes online versus an estimated 40-minute wait on the phone. The lesson? Use digital for what you can, but budget time for trickier issues.
What’s the Long-Term Fix for HMRC Delays?
Now, here’s a thought: the industrial action is a wake-up call to rethink how you manage taxes. HMRC’s aiming for 90% digital interactions by 2030, but with only 76% in 2024/25, they’re not there yet. Businesses and taxpayers can get ahead by leaning into automation now. Software like FreeAgent or Sage can track expenses, file returns, and flag errors before HMRC does. For individuals, apps like TaxScouts can simplify Self Assessment, saving you from HMRC’s backlog.
The strikes also highlight the need for resilience. If you’re a business owner, consider spreading tax filings across the year to avoid peak-time delays. For example, file quarterly VAT returns early in the cycle. This approach helped a Bristol tech startup avoid a £3,000 penalty in 2024 when HMRC’s processing slowed to a crawl.
By mastering these tools and strategies, you’re not just surviving the industrial action—you’re setting yourself up to handle whatever HMRC throws your way next.
Key Takeaways and Future-Proofing Your Taxes During HMRC Industrial Action
What Are the Most Important Points to Remember?
Now, let’s boil down everything you need to know about HMRC’s industrial action into bite-sized takeaways. These are the critical points to keep in your back pocket as a UK taxpayer or business owner, ensuring you stay on top of your taxes despite the disruptions running until 6 June 2025.
HMRC’s industrial action, driven by pay disputes, involves over 400 staff and disrupts key services like tax refunds and CIS processing.
Tax refunds for income tax and VAT are delayed, often taking 12–16 weeks instead of the usual 6–8.
CIS subcontractors face over-deductions due to slow verifications, impacting cash flow.
HMRC helplines have long wait times, with only 63% of calls answered and average waits of 23 minutes.
Digital tools like the Personal Tax Account and HMRC app are your best bet for managing taxes during strikes.
Filing tax returns early, especially Self Assessment by 31 January 2025, helps avoid penalties.
Third-party software like Xero or QuickBooks can streamline VAT and PAYE tasks, reducing reliance on HMRC.
Businesses should maintain a cash buffer to cover delayed refunds, ideally for 3–4 months.
Complex tax issues, like disputes, still require HMRC’s helplines, so plan for longer resolution times.
HMRC’s push for 90% digital interactions by 2030 means now’s the time to embrace online tax management.
These points are your roadmap to navigating the chaos and keeping your finances steady.
How Does Industrial Action Affect Non-Resident Taxpayers?
So, what if you’re not a UK resident but still deal with HMRC? Non-residents, like overseas landlords or workers with UK income, are hit hard by the industrial action. For example, if you’re claiming a refund under a double taxation treaty, delays can stretch beyond 16 weeks. In 2024/25, HMRC processed only 68% of non-resident refund claims within 12 weeks, down from 85% the previous year.
Take Javier, a Spanish consultant who earned £20,000 in the UK in 2023/24. He applied for a refund via form R43 in January 2025 but is still waiting in May due to strike-related backlogs. His advice? File claims early and use the Personal Tax Account to track progress. Non-residents should also double-check their tax residency status on www.gov.uk/check-income-tax-current-year to avoid overpaying.
What About Complex Tax Disputes?
Be careful! If you’re tangled in a tax dispute, the industrial action makes things trickier. HMRC’s compliance teams, handling audits or penalty appeals, are understaffed, slowing resolutions. In 2024/25, only 55% of disputes were resolved within 90 days, compared to 70% in 2023/24. This can tie up funds or lead to unexpected penalties if deadlines are missed.
Consider Lila, a Birmingham-based retailer whose VAT return was audited in December 2024. Her appeal, filed in January 2025, is still pending in May, as HMRC’s dispute team is swamped. She hired an accountant to chase HMRC via written correspondence, avoiding the clogged helplines. If you’re in a similar spot, write to HMRC at Corporation Tax Services, HM Revenue and Customs, BX9 1AX, and keep records of all submissions.
Are Late Penalties a Bigger Risk Now?
Now, here’s a reality check: HMRC isn’t cutting anyone slack on penalties, even with strikes. Miss the 31 January 2025 Self Assessment deadline, and you’ll face a £100 fine, plus 4% interest on late payments (based on the Bank of England’s base rate as of April 2025). For businesses, late VAT filings can trigger a surcharge of 2–15% of the tax due.
To dodge this, file early and use digital reminders via the HMRC app. In 2024, a Leicester construction firm avoided a £2,000 VAT penalty by filing their return in December, well ahead of the 7 January 2025 deadline. Proactive timing is your best defence.
What’s HMRC’s Future Look Like?
Now, let’s peek ahead. HMRC’s transformation roadmap, aiming for 90% digital interactions by 2030, is under pressure. The industrial action exposes their reliance on human staff, with only 76% of interactions digital in 2024/25. The Public Accounts Committee has slammed HMRC’s “inadequate” customer service, pushing for more investment in digital infrastructure.
For you, this means adapting now. Businesses should invest in software like Sage or FreeAgent to automate tax tasks. Individuals can use apps like TaxScouts to simplify Self Assessment. These tools aren’t just for surviving strikes—they’re for thriving in a digital tax world.
Tax Deadline | Date (2025/26) | Action to Take |
Self Assessment Filing/Payment | 31 January 2025 | File online via Personal Tax Account; pay any tax owed |
VAT Return (Q4 2024/25) | 7 May 2025 | Submit early via Business Tax Account |
PAYE Monthly Payment | 22nd of each month | Use third-party software to ensure accuracy |
CIS Return | 19th of each month | Verify subcontractors online to avoid over-deductions |
This table highlights key deadlines to watch, ensuring you don’t get caught out.
How Can You Build Resilience Against Future Disruptions?
Here’s the big picture: HMRC’s challenges won’t vanish overnight. Whether it’s strikes, understaffing, or digital teething pains, disruptions are likely to pop up again. So, how do you future-proof your taxes?
● Go Digital Early: Master HMRC’s online tools now to reduce reliance on helplines. Over 1.5 million businesses used the Business Tax Account in 2024/25, and it’s a trend worth joining.
● Plan for Delays: Build a cash buffer for 3–4 months to cover delayed refunds or unexpected tax bills.
● Stay Informed: Check www.gov.uk/government/organisations/hm-revenue-customs for updates on HMRC’s service status.
● Get Professional Help: For complex issues, like disputes or non-resident taxes, an accountant can save you time and stress.
Take Rory, a tech startup founder in London. In 2024, he switched to Xero for VAT and PAYE, filed returns quarterly, and kept a £10,000 cash reserve. When HMRC’s strikes hit, his business sailed through without a hitch. His approach—automation, early action, and a safety net—is a model for resilience.
By staying proactive and embracing digital solutions, you’re not just weathering the current storm—you’re ready for whatever HMRC throws your way next.
FAQs
Q1: What is the main reason for HMRC’s industrial action?
A1: The industrial action is primarily driven by pay disputes, as outsourced HMRC workers receive smaller pay rises compared to in-house staff, prompting strikes led by the PCS union.
Q2: How long will the HMRC industrial action last?
A2: The industrial action began in December 2024 and is scheduled to continue until 6 June 2025.
Q3: Who is affected by HMRC’s industrial action?
A3: UK taxpayers, including individuals, self-employed workers, small businesses, and non-residents, are impacted, particularly those relying on tax refunds, CIS processing, or HMRC helplines.
Q4: Can businesses still file corporation tax returns during the industrial action?
A4: Businesses can file corporation tax returns online via the Business Tax Account, though processing times may be delayed due to reduced HMRC staff capacity.
Q5: What happens if a taxpayer misses a tax deadline due to HMRC delays?
A5: HMRC does not waive penalties for missed deadlines, so taxpayers should file early to avoid fines, such as the £100 late filing penalty for Self Assessment.
Q6: Are HMRC’s online services affected by the industrial action?
A6: Online services like the Personal and Business Tax Accounts remain fully operational, offering a reliable alternative to disrupted phone and postal services.
Q7: How can taxpayers check the status of their HMRC queries?
A7: Taxpayers can use the “Where’s My Reply” tool on the HMRC website to estimate response times for queries or refunds.
Q8: What should subcontractors do if CIS verifications are delayed?
A8: Subcontractors should verify their status online via the Business Tax Account and contact their contractor to ensure correct tax deductions.
Q9: Can taxpayers appeal penalties during the industrial action?
A9: Taxpayers can appeal penalties by writing to HMRC, though resolution times may be longer due to reduced staff availability.
Q10: How does the industrial action affect VAT registrations?
A10: New VAT registrations may face delays, so businesses should apply early and track progress through the Business Tax Account.
Q11: Are HMRC’s postal services impacted by the industrial action?
A11: Postal services are slower, with delays in processing paper returns or correspondence, making online submissions a better option.
Q12: Can taxpayers still use the HMRC app during strikes?
A12: The HMRC app is fully functional, allowing taxpayers to track payments, view deadlines, and receive reminders.
Q13: What should businesses do if PAYE updates are delayed?
A13: Businesses should use third-party payroll software to ensure accuracy and submit updates early via the Business Tax Account.
Q14: How can non-residents contact HMRC during the industrial action?
A14: Non-residents should use the online contact forms on the HMRC website or write to the Non-Resident Tax Office, as phone support is limited.
Q15: Are there any exemptions for late penalties during strikes?
A15: HMRC does not offer blanket exemptions, but taxpayers can request penalty waivers by proving “reasonable excuse” through written appeals.
Q16: Can businesses claim interest on delayed VAT refunds?
A16: Businesses may be eligible for repayment interest if refunds are significantly delayed, calculated at the Bank of England base rate plus 2%.
Q17: How does the industrial action affect tax code disputes?
A17: Tax code disputes take longer to resolve, so taxpayers should submit corrections online and follow up with written correspondence if needed.
Q18: What support is available for charities affected by refund delays?
A18: Charities can use the Business Tax Account to track Gift Aid or VAT refunds and should maintain cash reserves to manage delays.
Q19: Can taxpayers escalate urgent issues during the industrial action?
A19: Urgent issues can be escalated by writing to HMRC’s dedicated addresses, such as Pay As You Earn and Self Assessment, BX9 1AS.
Q20: How can businesses prepare for future HMRC disruptions?
A20: Businesses should adopt accounting software, file taxes early, and build cash buffers to mitigate the impact of future delays.
About the Author
Mr. Maz Zaheer, FCA, AFA, MAAT, MBA, is the CEO and Chief Accountant of MTA and Total Tax Accountants—two of the UK’s leading tax advisory firms. With over 14 years of hands-on experience in UK taxation, Maz is a seasoned expert in advising individuals, SMEs, and corporations on complex tax matters. A Fellow Chartered Accountant and a prolific tax writer, he is widely respected for simplifying intricate tax concepts through his popular articles. His professional insights empower UK taxpayers to navigate their financial obligations with clarity and confidence.
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