In June 2022, HMRC published a consultation titled “Raising standards in tax advice; protecting customers claiming tax repayments”. As a result of the feedback received, to improve transparency in the repayment agent market and protect customers, the government’s planned steps, included introducing future legislation to render void, assignments of income tax repayments and introducing a new requirement for tax repayment agents to register with HMRC. The effect of such legislation would be that assignments of income tax repayments would have no legal effect and the repayment would remain the property of the customer.
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
A paid for Facebook ad and website, www.totaltaxrefunds.co.uk, for a tax repayment agent, seen on 4 August 2022:
a. The Facebook ad stated “Get your money from the tax man! 3 million claims have already been submitted, have you check [sic] to see if you’re owed £624? People who worked through COVID can claim up to £624 back from the tax man, use the FREE online tool below to check if you’re owed anything. It featured a box that included the text “People who worked through COVID are being refunded £624 but hurry …”. A link at the bottom of the ad stated “Takes less than 60 seconds to complete. Check if you qualify for a tax refund worth up to £624”.
b. The advertiser’s website included a landing page headlined “your £624 tax claims starts here”. It included a button labelled “check my claim”. Small print at the bottom of the page included links labelled “terms of business” and “pricing”.
The ASA challenged whether:
1. ads (a) and (b) were misleading because they implied the “free online tool” would confirm whether the consumer was entitled to a refund from HMRC; and
2. ads (a) and (b) exaggerated the refund payable to the consumer and did not make clear that the advertiser would deduct a fee of 42% of the refund, and a £30 admin fee, or that consumers could apply for a refund directly with HMRC free of charge.
1. Total Tax Claims Ltd t/a totaltaxrefunds.co.uk said that during the application process, clients answered a series of questions which determined their eligibility, and in some circumstances respondents would not be eligible to proceed with a claim. They said that the application process made clear that, following the eligibility check, totaltaxrefunds.co.uk would apply to HMRC for a refund on their client’s behalf.
2. Totaltaxrefunds.co.uk said that before they submitted their claim, all clients must review and agree to the terms of business. These stated that they charged fees of 42% of all refunds plus a £30 admin fee.
The ASA considered that readers would understand from the ads that if they completed the advertised online check, they would be informed whether they were owed a refund by HMRC and how much that was likely to be. While the online tool stated an amount that could be claimed when consumers entered their information into the form, we understood that it simply checked whether respondents were eligible for the advertiser to submit a claim to HMRC on their behalf, rather than being able to accurately estimate the claim amount. We therefore concluded that the ads were likely to mislead.
On that point, the ads breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising).
The ASA considered that readers were likely to understand the references to the amount that could be claimed, including that shown when they entered their details into the online tool, to indicate the amount of refunded tax they would be likely to receive if they used the advertised service. Totaltaxrefunds.co.uk did not send information to show that they had helped clients obtain refunds of £624, or any other amount.
Furthermore, we understood from the terms of business on the website that, if clients received a refund from HMRC, the advertiser would deduct fees of 42% of the refunded amount plus a £30 admin fee. While we noted that ad (b) featured terms and conditions indicating the percentage fee to consumers, we considered that did not give sufficient prominence to a significant factor likely to affect a consumer’s decision to apply for a refund. By omitting that information from the ads meant they were likely to mislead, including in relation to the refund available.
We also considered consumers were unlikely to be aware that there was a free route to claiming the advertised tax refund, and that was also significant information likely to affect how they would respond to the ads. Because that had been omitted from both ads, and for the above reasons, we concluded that they were likely to mislead.
On that point, the ads breached CAP Code (Edition 12) rules 3.1, 3.3 and 3.4.3 (Misleading advertising), 3.7 (Substantiation) and 3.9 (Qualification).
The ads must not appear again in the form complained of. We told Total Tax Claims Ltd t/a totaltaxrefunds.co.uk not to make claims about available refund amounts without supporting evidence and to ensure that their advertising included details of their fees and other significant conditions. We also told them to make clear that consumers could apply directly to HMRC at no cost and not to imply that their online check determined whether consumers were entitled to a refund from HMRC.