HMRC Cracks Down on High Volume Refund Tax Agents

Last year, HMRC alleged that a high-volume tax refund agent, Tax Credits Ltd (TCL), had operated an opaque sign-up service, submitted non-consensual tax rebate claims to HMRC and kept refunded monies for itself. The tax authority reimbursed 60,000 TCL clients who were duped by TCL while it continued to investigate evidence of financial malfeasance and underhanded business practices. As a result, HMRC has officially banned TCL from operating as a repayment agent due to serious anti-money laundering breaches.

The banishment comes amid an ongoing crackdown on unscrupulous tax repayment agents who employ dishonest tactics to claim back client taxes at the expense of the exchequer. In January 2022, HMRC added five organisations to a ‘blacklist’ of tax avoidance schemes which demonstrates the agency’s commitment to identifying and stopping these rogue firms.

The Integrity of the Tax Agent Sector

Despite finding that TCL had “ignored serious responsibilities under anti-money laundering measures”, HMRC’s Deputy Chief Executive Angela MacDonald was careful not to tar all agents with the same brush. She went on to say, “We will not allow a small number of bad actors to tarnish the reputation of the whole tax agent sector”.

HMRC has recently unveiled a package of measures to make life more difficult for insidious organisations who use misleading tactics. These include banning the use of legally-binding deeds of assignment, improving agent standards and demanding repayment agents register with HMRC.

Tax refund companies do play an important role in the tax system and it’s encouraging to see HMRC wielding their powers to remove bad actors and enact new policies that will protect taxpayers in the future.

How to Choose an R&D Tax Relief Partner

R&D tax credit advisors with a demonstrable history in the sector that do not require the signing of deeds of assignment or 64-8 forms should be a priority when choosing a tax partner. As we have seen, tax agents that employ deeds of assignment are viewed with suspicion and are now being ‘red flagged’ by compliance officers. This means that R&D tax credit claims submitted by these agents have a higher chance of HMRC enquiries being raised.

Cost Care Tax is committed to protecting the integrity of tax consultancy and the R&D tax relief schemes at large:

  • We will never ask clients to sign deeds of assignment or 64-8 agreements unless specifically requested.
  • We will never submit a claim or report to HMRC that we do not believe will stand up to scrutiny.

With a wealth of experience gained over many years of submitting R&D tax credit reports to HMRC, we are well placed to assess the eligibility of your claim. Call us today for a no obligation exploratory conversation with one of our tax experts.

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