TCL Shut Down for Major Anti-Money Laundering Violations

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Written by: Liez Comendador
Business Development UK

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A business that charged people a considerable amount to file claims for tax refunds without further transparency has been shut down. Once HMRC determined that Tax Credits Ltd (TCL) had engaged in major anti-money laundering violations, TCL could no longer operate as a repayment agent.

TCL primarily intended their services to prevent criminals from exploiting enterprises and laundering money, but the agency was soon discovered to have seriously violated the law after HMRC announced improved protections for clients utilising repayment agencies.

HMRC declaration about Tax Credits Ltd (TCL)

Taxpayers can use repayment agents to submit claims for tax refunds. However, many taxpayers have expressed dissatisfaction with the non-transparent client-signup procedures used by agents and the hefty costs associated with employing their services.

Angela MacDonald, HMRC’s deputy CEO and the second permanent secretary, said: “TCL have ignored their responsibilities under the anti-money laundering measures created to fortify us all from financial crime. We will not allow a small number of bad actors to tarnish the reputation of the whole tax agent sector.

“It is crucial taxpayers understand the entitlements they can claim directly from HMRC and are properly protected from the misleading tactics some repayment agents use. The greater protections we bring will help resist public unwittingly losing their hard-earned money to misleading agents.”

As TCL investigations continued, around 11,000 TCL clients will now get their tax refunds directly from HMRC. HMRC will contact all impacted clients by the end of March to discuss their refund. The refunds will be processed automatically; clients don’t need to contact HMRC to get paid.

In response to public concern, HMRC recently examined how to safeguard taxpayers using repayment agents. Last month, they unveiled a package of measures that included ending the use of legitimate “assignments” to claim an Income Tax Repayment, enhancing agent standards and requiring repayment agents to register with HMRC.

HMRC warns taxpayers to exercise extra caution when clicking on online advertisements since some fraudulent repayment agents have tricked their client sign-up pages into looking like simple information requests.

References

HM Revenue & Customs. 2023. ‘Tax Agency Stopped from Operating by HMRC’, GOV.UK: https://www.gov.uk/government/news/tax-agency-stopped-from-operating-by-hmrc

Sandlin, Heather. 2023. ‘HMRC Shuts down Tax Agency after Anti-Money Laundering Breaches’, Accountancy Today (Accountancy Today): https://www.accountancytoday.co.uk/2023/02/20/hmrc-shuts-down-tax-agency-after-anti-money-laundering-breaches/

Author

  • Faizan Rashid

    Faizan is a well-qualified accountant with a firm belief in a team environment, working to deadlines, is usually absolute as tax return deadlines are non-negotiable. He is highly regarded and the most experienced professional of Legend Financial.

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