HMRC launches consultation to address concerns about repayment agents
The HMRC has launched a 12-week consultation to find new measures to stop rip-off agents from taking advantage of people and pocketing their tax repayments.
The consultation – “Raising standards in tax advice: Protecting customers claiming tax repayments” – will consider ways to better protect taxpayers from repayment agents who make routine tax claims on people’s behalf but can take up to half, or even more, of the payment.
Taxpayers can use repayment agents to make claims for repayments of tax, and many are happy with the service they receive. On the other hand, many taxpayers have complained that the scale of the charges is unclear or even hidden, while questions have been raised about how some agents secure agreements from customers.
The consultation proposes various ways to better protect the public from unscrupulous practices and ensure they receive the money they are entitled to, while also asking various questions to better understand the problem.
This includes seeking views on:
- Restricting the use of assignments, where contracts legally transfer the right to a repayment from a taxpayer to an agent
- Introducing measures designed to ensure taxpayers see material information about a repayment agent’s service before entering into a contractual agreement
- Requiring repayment agents to register with HMRC
HMRC is aware of a number of specific concerns with the industry including excessive amounts of commission charged for routine tax repayments. However, taxpayers can make a claim directly through HMRC’s free online service on GOV.UK and keep 100 per cent of the repayment themselves.
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