HMRC is consulting on proposals to address consumer protection issues for people who claim tax refunds through repayment agents. The consultation is part of the UK government’s agenda to raise standards in the market for tax advice. Views are sought on whether HMRC should:
restrict the use of assignments, which legally transfer the benefit of the taxpayer’s repayments to the agent;
introduce measures to ensure taxpayers see material information about a repayment agent’s service before entering into a contractual agreement, to ensure that taxpayers are made aware and fully understand the terms and conditions to which they are agreeing; and
require repayment agents to formally register with HMRC.
The Low Incomes Tax Reform Group (LITRG) welcomed the consultation, saying its concerns in this area are ‘longstanding and growing’.
In addition to the high cost to consumers of claiming tax refunds from some repayment agents, LITRG has heard from people saying:
they have confused tax refund companies with HMRC, thinking they are dealing with the tax authority direct;
tax refund companies have been unresponsive when they are trying to contact them; and
they are concerned about protection of their data where the repayment agent requests significant personal information in order to process payment of a refund to them.
Kelly Sizer, senior technical manager at LITRG, said: ‘The practices of some repayment agents are unacceptable, and this is an area where HMRC need to act urgently to protect taxpayers.’
‘We welcome HMRC putting deeds of assignment and other consumer protection issues under the spotlight to improve the system going forward,’ Sizer said. ‘But we are concerned that while the consultation takes place and changes are implemented, more taxpayers will be affected in the meantime. We urge HMRC to consider what more they can do to protect people in the interim.
‘For example, there is a serious question over whether some of the deeds of assignment that HMRC are currently accepting are valid in accordance with HMRC’s own guidance because the process under which signatures have been collected and attached to assignment documents is not always transparent. This means taxpayers may not have seen, understood or approved the deed. Greater scrutiny on HMRC’s part before accepting such deeds is urgently required.’
HMRC is consulting on proposals to address consumer protection issues for people who claim tax refunds through repayment agents. The consultation is part of the UK government’s agenda to raise standards in the market for tax advice. Views are sought on whether HMRC should:
restrict the use of assignments, which legally transfer the benefit of the taxpayer’s repayments to the agent;
introduce measures to ensure taxpayers see material information about a repayment agent’s service before entering into a contractual agreement, to ensure that taxpayers are made aware and fully understand the terms and conditions to which they are agreeing; and
require repayment agents to formally register with HMRC.
The Low Incomes Tax Reform Group (LITRG) welcomed the consultation, saying its concerns in this area are ‘longstanding and growing’.
In addition to the high cost to consumers of claiming tax refunds from some repayment agents, LITRG has heard from people saying:
they have confused tax refund companies with HMRC, thinking they are dealing with the tax authority direct;
tax refund companies have been unresponsive when they are trying to contact them; and
they are concerned about protection of their data where the repayment agent requests significant personal information in order to process payment of a refund to them.
Kelly Sizer, senior technical manager at LITRG, said: ‘The practices of some repayment agents are unacceptable, and this is an area where HMRC need to act urgently to protect taxpayers.’
‘We welcome HMRC putting deeds of assignment and other consumer protection issues under the spotlight to improve the system going forward,’ Sizer said. ‘But we are concerned that while the consultation takes place and changes are implemented, more taxpayers will be affected in the meantime. We urge HMRC to consider what more they can do to protect people in the interim.
‘For example, there is a serious question over whether some of the deeds of assignment that HMRC are currently accepting are valid in accordance with HMRC’s own guidance because the process under which signatures have been collected and attached to assignment documents is not always transparent. This means taxpayers may not have seen, understood or approved the deed. Greater scrutiny on HMRC’s part before accepting such deeds is urgently required.’
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