A brace from Zlatan Ibrahimovic and another from Anthony Martial gave United a comprehensive 4-1 win at Old Trafford, with former Red Devils youngster Ashley Fletcher scoring a solitary goal for the visitors.
United had drawn 1-1 with the same opponents in the Premier League on 27 November to fall 11 points behind leaders Chelsea in the standings.
Neville said United were performing to the same standard in both cup competitions and the league, but that they were putting away the chances they were creating in the former.
"I think the performances are no different from the cup and the league, the difference is that in the cup competitions they're finishing teams off, look ruthless in front of goal, and look happier," he told Sky Sports.
"I don't think United are too far away. I think they've drawn games they should have won, and if they'd won those games they'd be in the top four.
"I actually think United are going in the right direction, it's a better brand of football we're watching now than what we saw under Louis van Gaal, so I think United fans will be happy. They've got to start scoring goals in the Premier League. If they do, they'll finish in the top four," he added.
Henrikh Mkhitaryan was named man of the match after setting up a goal each for Ibrahimovic and Martial, and Neville called on United manager Jose Mourinho to start the Armenia international in more matches.
"He was fantastic, and what impresses me most is that he doesn't take more than one or two touches," the former Everton defender said.
"He's infectious around [Wayne] Rooney, Martial, Ibrahimovic, and he brings people into the game. I just think he has to start starting in Premier League games."