The government is keen to ensure that taxpayers pay the right amount of tax, and, where they are entitled to a refund, can access this easily.
They are aware that some taxpayers face issues and feel misled when using agents that specialise in claiming tax refunds from HMRC. Repayment agents can provide a useful service to taxpayers, supporting them to make claims for repayments of tax where this is due.
However, HMRC has received increasing numbers of complaints from customers who have used ‘repayment agents.’ Additionally stakeholders have raised concerns about consumer protection in the repayment agent market directly with government and in the media.
Issues they have raised include:
- the use of assignments, which legally transfer the benefit of the taxpayer’s repayments to the agent
- taxpayers not being made aware of or fully understand the terms and conditions to which they are agreeing
- taxpayers being unaware that they are dealing with a third party and not HMRC
HMRC has also seen large numbers of ineligible claims made by some repayment agents, which delays the processing of genuine claims.
The government is seeking views on potential measures to help taxpayers make informed decisions about whether to use a repayment agent, to restrict the use of assignments, and to require repayment agents to formally register with HMRC. This consultation is part of the agenda to raise standards in the market for tax advice, and is linked to powers to uphold the Standard for Agents and wider regulatory framework for the provision of tax services.
The government recognises the unique issues associated with repayment agents and considers more targeted action is needed to tackle these issues.
The consultation closes on 14th September 2022.
Through social media and web search engines, we can become bombarded by constant advertising of tax reclaim agents who, on the one had, promote individuals obtaining tax reliefs they are entitled to, but some face unscrupulous charges or legal vehicle through the use of assignments. These often result in high proportions of individuals money being diverted into the profits of repayment agents.
For obtaining professional help, an individual would expect to pay a reasonable fee for assistance, however, in some cases individuals never receive any of the reclaim money or only receive a small proportion. Some tax payers have found it virtually impossible to cancel any assignments they inadvertently agreed too.