The tax authorities have stepped in to stop a major abuse of tax refunds by unscrupulous agents. These agents advertised widely, offering to make claims for tax relief (eg marriage allowance or working from home relief ) on behalf of taxpayers. The claims are simple for taxpayers to make, but the agents made customers sign an agreement giving the agents the right to receive the money. They then kept a big chunk of it and passed the rest on to the taxpayer… eventually. The agreements were open-ended and meant that any future tax refunds from HMRC would go to the agent not the taxpayer – who could lose, for example, refunds due when HMRC reconciled its PAYE records for tax deducted at work. The strange nature of these “assignments”, as they were called, meant that the taxpayer could not end it without the permission of the agent – which they never gave.
For some years HMRC claimed it could do nothing to end this abuse. But earlier in 2023 it announced that it had prevented one such agent, called Tax Credits Ltd (TCL), from operating, using laws designed to prevent money-laundering. TCL had more than 11,000 outstanding claims on behalf of individual taxpayers, and HMRC said it would pay those direct to taxpayers. And now it will not allow agents to receive tax refunds on behalf of their clients.
There are still some firms that appear on google searches that offer to claim tax back for individuals, though. You should never use one of them; instead, claim the tax back yourself.
If you’re married (or civil partnered) and one of you has an income too low to pay income tax (below £12,570 a year) and the other does not have an income above £50,270 (or above £43,662 in Scotland) then you could claim marriage allowance – worth £252 a year off the taxpayer’s bill. If you worked at home in the tax years 2020/21 or 2021/22, even for as little as one day in the year, then you could claim tax relief worth £62.40 for each year (double that if a higher-rate taxpayer). Simply claim by searching gov.uk for “marriage allowance” or “working from home”.