Why has HMRC started using tax return limited?

Sarahspangles

There must be lots of people who prefer or need payment to an intermediary, like executors, minors, people without capacity and wealthy time-poor people. And it’s convenient to net off the cost if you’re using an accountant, just like paying your solicitor and estate agent when you sell your house, on completion.

What needs tackling is these firms that prey on people who think they’re getting a one-time service, but are signing up for more because it’s hidden in small print.

Nomunnofun1

Dazed_and_C0nfused said:

Nomunnofun1 said:

etienneg said:

Why don't we just require (by law) HMRC to pay ALL tax refunds directly to the taxpayer?

Because HMRC are obliged, by law, to act upon a signed authorisation to send the refund elsewhere. 

Without that it is automatically sent to the taxpayer. 

Many accountants use this option to ensure that they are paid their fees, most commonly in the case of those entitled to repayment of SC60 tax. It has not been unknown for the taxpayer to retain the refund and not pay their accountant!

That's a blast from the past!!

Only about 25 years or so - relatively recent! 😁

Grumpy_chap

pinksusie said:

Recent got a message from HMRC saying they owed me £194.27 and they had sent the cheque to Tax return limited. So contacted Tax return limited to request my money and the have charged me £125.28 for the privilege of giving me my own money. 

!!!!!! what sort of a scam is this? How do I get the rest of my money. I work bloody hard for every penny I earn, and it is bad enough HMRC taken too much tax to begin with without losing my hard earned cash to some tax agency scammers. Why could HMRC spend me the money directly like they previously have?

What was the basis for the £194.27 tax rebate / refund?
If the intermediary company which you must have engaged to act as your Agent at some time have claimed on a spurious basis, not only have you suffered the loss of the £125.28 fees but, should the HMRC audit and seek recovery of the incorrect rebate / refund, the OP will be liable for the full amount.

mlz1413

pinksusie said:

Recent got a message from HMRC saying they owed me £194.27 and they had sent the cheque to Tax return limited. So contacted Tax return limited to request my money and the have charged me £125.28 for the privilege of giving me my own money. 

!!!!!! what sort of a scam is this? How do I get the rest of my money. I work bloody hard for every penny I earn, and it is bad enough HMRC taken too much tax to begin with without losing my hard earned cash to some tax agency scammers. Why could HMRC spend me the money directly like they previously have?

Did you recently reach state pension age?
I ask because I came across this once with a man who reached pension age and got an official looking letter (posted) saying he maybe due a refund,  as he was a sub contractor he got a refund most years.
I read it through 3 times before I spotted the 'small print' which was tiny and where the page number is at the bottom. 
This said they charged 25% of any refund. 

This man had not clicked any link or given his address to anyone. So I had to assume it was sent to people as they received a pension, but how was a mystery. 

Flugelhorn

pinksusie said:

Recent got a message from HMRC saying they owed me £194.27 and they had sent the cheque to Tax return limited. So contacted Tax return limited to request my money and the have charged me £125.28 for the privilege of giving me my own money. 

!!!!!! what sort of a scam is this? How do I get the rest of my money. I work bloody hard for every penny I earn, and it is bad enough HMRC taken too much tax to begin with without losing my hard earned cash to some tax agency scammers. Why could HMRC spend me the money directly like they previously have?

think the rest of money is gone as your agreed fee to them - all you can do is make sure you unregister or whatever with these people and only deal with HMRC directly yourself

saajan_12

etienneg said:

Why don't we just require (by law) HMRC to pay ALL tax refunds directly to the taxpayer?

Because some taxpayers don't want to deal with that. Some big time movie star doesn't want to receive and check tax payments, manage a bank account etc in every country they have taxable affairs in. Those people have accoutants to do it for them - I know accountants with such clients, where they provide this very service with complicated tax calculations and a host of other financial planning. 

The trouble is where do you distinguish between those and an online service where they just feed the same request to HMRC with no time save and charge a disproportionate fee. 

Nomunnofun1

saajan_12 said:

etienneg said:

Why don't we just require (by law) HMRC to pay ALL tax refunds directly to the taxpayer?

Because some taxpayers don't want to deal with that. Some big time movie star doesn't want to receive and check tax payments, manage a bank account etc in every country they have taxable affairs in. Those people have accoutants to do it for them - I know accountants with such clients, where they provide this very service with complicated tax calculations and a host of other financial planning. 

The trouble is where do you distinguish between those and an online service where they just feed the same request to HMRC with no time save and charge a disproportionate fee. 

Authorising HMRC to act on behalf of a client (64-8) and authorising HMRC to send repayments directly to an agent are two entirely different concepts!

LITRG

Hi, sorry to hear about this. You may find our guidance helpful where we discuss all the issues with refund companies and set out some steps you can take if you feel you have been caught out: https://www.litrg.org.uk/tax-nic/how-tax-collected/tax-refunds/tax-refund-companies