Taxation in the UK – administration and collection of taxes – is the responsibility of HM Revenue and Customs (HMRC). But as in any case, it has some troubles. The number of individuals who have complained to His Majesty’s Revenue and Customs about businesses collecting tax refunds on their behalf has increased more than three times in the past two years.
Taxation in the UK
Your annual income tax payment is determined by:
- what portion of your income exceeds your allowance
- what proportion of your income is subject to each tax bracket
Some income is exempt from taxes.
Taxation rates in UK
- Personal Allowance with taxable income up to £12,570 has a tax rate of 0%
- The basic rate in diapason £12,571 to £50,270 has 20%
- Higher rate – £50,271 to £150,000 has 40%
- Additional rate over £150,000 has a 45%
The “letters of assignment” become the subject of the complaints
A deed of assignment is a legal instrument that requires both parties’ consent and occurs when an individual grants another person the authority to assert their claim to a right to something, typically monetary.
The case of a retired man who got three letters from HMRC is one instance that can serve as an illustration of the issue.
The letters said that the man’s claimed marriage payment of £974 will be paid as requested by a tax repayment firm. It is a form of reducing income tax. If your income is below the usual Personal Allowance and you are married or in a civil partnership, you may be able to use the Marriage Allowance to lower your partner’s tax.
The issue was that a man had never heard of the firm in question, had never requested the money, and had still not received a penny of it after two months.
He has been attempting to reach the business that HMRC has to pay his funds to for weeks. He didn’t get anything and is unsure of when he will receive any of his funds.
Some businesses operating amid the legitimate ones may take advantage of the uncontrolled nature of the tax refund industry.
As a result, although some individuals voluntarily sign up with a payback company, receive their money as anticipated, less an agreed-upon charge, and go on, for others, all that exists is confusion and resentment.
HMRC claims to have initiated a review early this summer to examine how to best safeguard better taxpayers who use repayment agencies because it acknowledges there are serious issues around their use.