Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what checks his Department conducts to help prevent unauthorised third parties claiming commission on refunds from HMRC.

The Government is committed to maintaining trust in the tax system and protecting customers. However, the Government is aware that some taxpayers face issues and feel misled when using companies that specialise in claiming tax refunds from HMRC. This service is provided at a cost (often on a no-win, no fee commission basis) unlike claiming directly from HMRC which is free of charge.

Following a consultation last year, ‘Raising standards in tax advice: Protecting customers claiming tax repayments’, the Government is taking action to address concerns raised. This includes introducing new transparency requirements in the HMRC Standard for Agents, published in January 2023, to ensure customers are clear on the agent’s fees and charging structure.

The Government has also introduced legislation in the Finance Bill 2023 to end the use of assignments in income tax repayment claims and announced on 27th April the introduction of a requirement for repayment agents to register with HMRC.

There are many ways in which a customer can authorise a third party to act on their behalf. Following the consultation, HMRC is also undertaking further work to develop options for a more modern and secure approach to agent authorisation.

HMRC monitors agents and challenges them when there are potential concerns about their practices. HMRC will take action if a tax agent does not adhere to the HMRC Standard for Agents including suspending claim processing until any issues are resolved.