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HMRC sets out new plan to stop rip-off agents pocketing hefty fees from people claiming tax refunds

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HM Revenue and Customs (HMRC) has announced proposed new measures to stop rip-off agents taking advantage of people and pocketing their tax repayments.

Taxpayers can use Repayment Agents to make claims for tax refunds, and many are happy with the service they receive.However, many taxpayers have complained to HMRC that the scale of the charges are unclear or even hidden, while questions have been raised about how some agents secure agreements from customers.To combat this, HMRC has now launched a 12-week consultation “Raising standards in tax advice: Protecting customers claiming tax repayments” to consider ways to better protect taxpayers from Repayment Agents who make routine tax claims on people’s behalf but can take up to half, or even more, of the payment.The consultation proposes various ways to better protect the public from unscrupulous practices and ensure they receive the money they are entitled to, while also asking various questions to better understand the problem.This includes seeking views on:HMRC is aware of a number of specific concerns with the industry including excessive amounts of commission charged for routine tax repayments.However, taxpayers can make a claim directly through HMRC’s free online service on GOV.UK and keep 100% of the repayment themselves.HMRC said there is also strong evidence that many taxpayers do not understand the terms they are signing up to and feel misled, some even believing they are dealing with HMRC directly rather than a third party.Other concerns include the submission of high volume or speculative claims where no repayment is due, resulting in delays to genuine claims, as well as the use of assignments which means the repayment goes to the Repayment Agent instead of the

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