Person holding sign with the words Tax Refund written on it
Government to provide greater protection for customers using tax repayment agents

Proposals to address consumer protection issues for individuals who claim tax repayments via repayment agents were considered as part of a consultation issued in summer 2022.   

Last month a summary of the responses was issued.  With the topic being such an emotive subject, it was not surprising that there were nearly 170 responses encompassing individuals and professional bodies together with tax agents and repayment agents.  The overwhelming majority of the respondents agreed with the consultation’s concerns that greater safeguards were required for individuals using repayment agents.   

As a result of the feedback, the Government is taking several steps to improve transparency in the repayment agent market and protect taxpayers, including: 

  • Introducing legislation to render void assignments of income tax repayments (i.e. where an individual’s repayment is paid to an agent rather than to the individual). 

  • Requiring repayment agents to register with HM Revenue & Customs (HMRC). 

  • Introducing new transparency requirements for agents in the HMRC Standard for Agents, to clarify specifics of the relationship between the individual, the agent and HMRC. 

  • Exploring the introduction of mandatory pre-contractual disclosure forms and strengthening checks on repayment agents. 

  • Undertaking further work to strengthen the evidence that a claim has been made with a taxpayer’s consent before processing it and improve the way in which customers authorise their agent. 

The Government believes that these actions will tackle some of the issues associated with repayment agents and will also support its broader agenda to raise standards in the tax advice market.  

If any of your employees use, or may previously have used, tax repayment agents the outcome of the consultation may be of interest to them. The consultation responses could help them spot current issues with the repayment agent process which could affect them, and should provide reassurance that the Government is taking steps to resolve those shortcomings.  

 

This article reflects the position at the date of publication (21 February 2023). If you are reading this at a later date you are advised to check that that position has not changed in the time since.   

 

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