The number may be up for cheeky firms that impersonate official HMRC sites and charge hefty fees to claim tax rebates taxpayers can do themselves for nothing.
The Government is clamping down on the companies - which often advertise on social media - and confuse people into thinking they are official His Majesty's Revenue and Customs (HMRC) services. It is only when they get a bill for up to 48% of the value of the rebate that they realise they have been ripped off.
HMRC received more than 2,200 complaints about repayment agents between January 2022 and October 2022, and launched a consultation last year. It has now published the new measures, including tax rebate firms now having to register with HMRC and improve their standards so customers fully understand what they are signing up for.
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Financial Secretary to the Treasury Victoria Atkins said: "For too long taxpayers have been left in the dark as a result of misleading and opaque agreements with repayment agents. These new measures will ensure those who are entitled to claim a tax repayment or relief can do so freely and easily - whether they choose to do this themselves or by using an agent."
The new measures also include halting the use of legally binding assignments as part of claiming an income tax repayment. Assignments legally transfer the benefit of the taxpayer's repayments to the agent. They can only be cancelled if the agent and taxpayer both agree, but customers have said they've struggled to get in contact with repayment agents - leaving them unable to cancel their assignment.
HMRC also said it is often the case that the terms and conditions of these assignments are not made clear to the customer. Under new arrangements, if a taxpayer uses a repayment agent, they will need to make a nomination, which they can cancel at any time. There will also be a new 14-day cooling off period when entering into an agreement with an agent, so they can cancel any arrangements.
Angela MacDonald, HMRC's deputy chief executive and second permanent secretary, said: "Taxpayers deserve better - we want to make sure they are better protected before choosing to enter into an agreement with a repayment agent. HMRC's updated standards for agents will level the playing field and provide the benchmark we expect all repayment agents to meet."
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown: “HMRC is clamping down on tax rebate rip-offs. Taxpayers were being charged high fees by companies they had sometimes been bamboozled into believing were part of HMRC. In some cases, they were even charged these fees on rebates the company had nothing to do with too. It’s demanding more clarity from these companies, more accountability and new rules to help stop them taking a chunk of future rebates. Thousands of people had complained about the way these firms were operating, so better regulation is very welcome.”
You canb claim a tax rebate free here.
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