Tax claim agents: New rules

Measures to stop firms taking advantage of people and pocketing their tax repayments are currently in the pipeline.

HM Revenue and Customs (HMRC) is considering ways to better protect taxpayers from repayment firms who make routine tax claims on behalf of clients but can take up to half, or even more, of any rebate.

Taxpayers can use these agents to make claims for tax repayments. Many 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 their customers.

HMRC is consulting on proposals that will look at ways to better protect the public from unscrupulous practices and ensure they receive the money they are entitled to.

HMRC said it was aware of a number of concerns including excessive amounts of commission charged for routine tax repayments. However, taxpayers can make a claim directly through HMRC’S free online service at gov.uk and keep 100% of the repayment themselves.

There is also evidence many taxpayers do not understand the terms they are signing up to and feel misled, some even believing they are dealing with HMRC directly.

Jonathan Athow, HMRC’S director general for customer strategy and tax design, said: “We want to make sure taxpayers receive their full tax claims – putting 100% of the money they are due into their pockets – and not be taken in by the unscrupulous practices of some repayment agents.

“The consultation aims to seek views so we can better understand and address the issues to help raise standards in the tax advice market. We’re urging anyone affected to respond to the consultation.”