Tax rebate firms are facing new regulations to prevent abuse of the ‘assignment’ system.
What is changing?
Currently, some tax rebate companies use the ‘assignment’ system to make claims on behalf of their customers. This assignment usually takes the format of an online form. The restrictions placed by an assignment on individuals can be onerous, such as legally transferring any rights to tax rebates to the rebate company, and not allowing the individual to leave the assignment without consent of both parties.
Future assignments are to be scrapped in favour of nominations. Nominations are more user friendly arrangements where the individual keeps the legal right to their tax rebate, and can leave the agreement unilaterally.
Existing assignment agreements will remain.
When is it changing?
There is no deadline set yet, but legislation will need to change before future assignments can be disallowed.
Will tax rebate companies be required to register with HMRC?
Yes, they do not currently have to, but will be required to in future.
Do I have to use a tax rebate company?
No, you can make a claim for free here How to claim a tax refund – GOV.UK (www.gov.uk)
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