CAP issues Enforcement Notice to industry over tax repayment agent ads

Dec 7th '23

The Committee of Advertising Practice (CAP) has issued an Enforcement Notice to tax repayment agents over misleading adverts, as part of its work with HM Revenue and Customs (HMRC).


CAP and HMRC have seen an increase in ads from tax repayment agents and have concerns that despite prior warnings, there are still some breaking the rules. The Enforcement Notice sets tells advertisers that they must ensure they are not misleading the public through their ads.


Earlier this year, the Advertising Standards Authority (ASA) banned ads from three tax repayment agents for misleading claims within their ads, for example failing to clearly state that the agent would deduct a fee from the refund, or failing to indicate that by using their services the agent would have a legal right to receive the tax refund, which could have an impact on other repayments owed to them for preceding years.


CAP will undertake enhanced monitoring to proactively find ads that break the rules and get them removed.


The Enforcement Notice coincides with HMRC launching a new campaign to help consumers understand the risks posed by misleading ads from some repayment agents and what they should consider when claiming tax refunds on work expenses.


Ads from tax repayment agents need to include all significant information, including fees payable, that free eligibility checks may result in a contractual agreement being entered into and the existence of a free route to claim tax refunds directly through HMRC. They mustn’t imply that their online ‘calculator tools’ can determine if consumers are entitled to a refund by oversimplifying the rules.


CAP is working in partnership with HMRC to ensure ads from tax repayment agents are up to scratch. Earlier this year, HMRC introduced new legislation which ended the use of ‘assignments’ for income tax refunds, which consumers could only end if both they and the agent agreed to do so, replacing them with ‘nominations’ – giving greater control to taxpayers.


HMRC will continue to challenge repayment agents whenever there are concerns about their practices too and where it finds wrongdoing will either issue penalties, suspend claims or refuse to deal with an agent.


Shahriar Coupal, Secretary of CAP, said: “We’ve seen repeat issues with how tax repayment agencies are being advertised, failing to include necessary information, and we’re taking action.  …  “Consumers need to have all the facts before making decisions about whether to use a tax repayment agent. This Enforcement Notice, alongside the ongoing work from HMRC, will make it clear that advertisers need to carefully follow our rules or face sanctions.”


Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “We are committed to tackling the underhand tactics used by some unscrupulous tax agents that mislead taxpayers and can leave them out of pocket.  …  “Some tax refund companies will offer to make expense claims on your behalf, just so they can claim a commission – even if it turns out you aren’t eligible to claim. The easiest way to check eligibility and claim a tax refund is directly with HMRC on GOV.UK.”


Source: CAP


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