12 January 2023 , 09:35
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Great news to kick off the year - action to tackle profiteering tax rebate rogues.
Last year I exposed firms that offer help in reclaiming overpaid tax but keep huge chunks of any payout.
Some victims found they were trapped in legally-binding "assignments" which meant they couldn't get out of supposed contracts, even when claiming that they'd never signed up to a rebate firm in the first place.
One notorious outfit is Mortgagesmiths of Leeds, founded by Nasser Mughal, 35.
Last year I highlighted complaints from taxpayers saying it has claimed rebates on their behalf without their permission and then they struggled to get the company removed from their tax account.
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Among its unhappy customers is John Head of Torquay, who was told by HM Revenue and Customs that he would receive a rebate of £139 for working from home during lockdown, but after Mortgagesmiths took its cut he got a cheque for just £52.
And it bounced.
Mortgagesmiths tells me that Mr Mughal has now left the company and new director Richard Hammond said: "There was an issue on a few cheques which has now been resolved."
"Client satisfaction is important to us," he added.
Now HMRC has announced it will be banning the use of "assignments", replacing them with agreements that can be cancelled at any time, and it will require greater proof from firms that customers have consented to a third party acting on their behalf.
Victoria Atkins, Financial Secretary to the Treasury, said: "For too long taxpayers have been left in the dark as a result of misleading and opaque agreements with repayments 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 changes were welcomed by Victoria Todd of the Low Incomes Tax Reform Group.
"Refund companies have a legitimate role in the tax system, but the practices of some of these companies in recent years have been unacceptable," she said.
Got issues with a tax reclaim firm? Email me at [email protected]
Baroness Mone's £20m London home owned by offshore firms linked to tax avoidance