Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will take steps to prevent tax rebate companies from taking a proportion of money owed to a person in a tax rebate.

Individuals can claim tax repayments directly from HMRC, which has introduced new digital services to make this easier. If they claim directly, as many individuals do, they get to keep the full amount of the payment they are due.

Around 500,000 individuals use third-party repayment agents annually to claim tax refunds. Many individuals value this service, understand and accept the fee structure, and are repeat users. The government recognises this and does not want to prevent individuals who want to use repayment agents from doing so.

However, the government recognises concerns that some individuals are being charged excessive fees, and that the terms and conditions under which services are provided have not been made clear.

The government launched a consultation “Raising standards in tax advice: protecting customers claiming tax repayments” on 22 June 2022, which proposes measures to protect the public from unscrupulous repayment agent practises. This consultation will close on 14 September 2022. This forms part of the government’s agenda to raise standards in the market for tax advice.