HMRC launches consultation on Repayment Agents
New measures to stop ‘rip-off’ agents taking advantage of people and pocketing their tax repayments have been proposed by HMRC.
The 12-week 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 repayment.
HMRC said: “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 are 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 said: “There is also strong evidence that many taxpayers do not understand the terms they are signing up to and feel misled, some even believing they are dealing with HMRC directly rather than a third party.
“Other concerns include the submission of high volume or speculative claims where no repayment is due, resulting in delays to genuine claims, as well as the use of assignments which means the repayment goes to the Repayment Agent instead of the taxpayer.”
HMRC is interested in hearing the views of all tax agents, particularly those who specialise in helping taxpayers claim repayments; taxpayers who have claimed or considered claiming tax refunds through repayment agents; those who have seen adverts from repayment agents; charitable organisations; consumer groups; and accountancy professional bodies.
The consultation is now open and will run until 14 September 2022.