In its response to the consultation “Raising standards in tax advice: protecting customers claiming tax repayments”, the Institute sets out some of the root causes underlying why repayment agents have been able to set up in recent years. This includes tax complexity, and the UK’s tax policy making process amongst others. Although some proposals in the consultation could assist in mitigating poor behaviours by certain repayment agents, educating taxpayers to understand how the tax system impacts on them and enabling them to claim reliefs and allowances through a simple online process via their Personal Tax Account would reduce the number of taxpayers seeking help from these agents in the first place.
In respect of the consultation proposals:-
- Repayment agents should not be treated any differently to any other tax agent and should be required to both sign up for an agent services account and obtain formal authorisation by clients via a 64-8 or through the online authorisation service;
- Clearer information and restrictions on the use of assignments would all help improve the issues arising from poor behaviours by certain repayment agents;
- The use of personal online credentials by repayment agents is not only a fraud risk but, if the agent is a member of a professional body such as Chartered Accountants Ireland, is also a breach of professional standards. HMRC should use the relevant powers at its disposal to report such breaches to the relevant professional body; and
- HMRC is considering a number of options, which would have a UK-wide application, to restrict the assignment of tax repayments. HMRC needs to be clear that such options will also apply to all types of repayment agents located both within and outside the UK as there is a risk that some repayment agents may go offshore to avoid any restrictions introduced.
The Institute also made a number of other recommendations which you can read in the submission here.