11 January 2023 , 11:13
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Taxpayers have been given stronger protection against “rip-off” third-party firms that charge you to process tax rebates.
These repayment agents can charge a fee of up to 48% for their service - so around half your money owed - despite it being free to claim a tax rebate yourself through the Gov.uk website.
To confuse things further, many of the websites - which often pop up as advertisements on social media - are designed with the same colours and logos as HMRC.
The Mirror has previously spoken to several people who have used these tax rebate companies without realising they're not linked to HMRC - or free to use.
HMRC confirmed it was launching a consultation back in June last year and it has now published new measures to help taxpayers.
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HMRC is introducing new measures to help taxpayers (Brentwood Gazette)Tax rebate firms will now have to register with HMRC and improve their standards so customers fully understand what they are signing up for.
The use of legally binding assignments as part of claiming an income tax repayment will also stop.
Assignments legally transfer the benefit of the taxpayer's repayments to the agent - but they can only be cancelled if the agent and taxpayer both agree.
The Mirror has heard from customers who say 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.
Stricter rules will also introduce a new 14-day cooling off period when entering into an agreement with an agent, so they can cancel any arrangements.
HMRC received more than 2,200 complaints about repayment agents between January 2022 and October 2022.
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."
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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."
Sarah Coles, senior personal finance analyst, 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.”