Concerns about tax repayment agents

HMRC has launched a new consultation seeking views on proposed measures to address consumer protection issues for people who claim tax refunds through repayment agents. The 12-week consultation period started on 22 June and will end on 14 September 2022. HMRC is looking to introduce new measures to stop rip-off agents taking advantage of people and pocketing their tax repayments. 

HMRC has received increasing numbers of complaints from taxpayers who have used ‘repayment agents’. These are generally agents helping taxpayers and businesses make claims to HMRC that result in a tax repayment as their main service, without providing wider tax or accountancy services.

These businesses are often virtual, advertising on social media, and tend to operate a no-win no-fee commission-based structure with large volumes of relatively low value claims. The fees they charge are often opaque and can result in half, or even more, of a tax repayment being lost to the claimant.

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.'

This consultation will seek 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.