This week's opinion: 5 November 2020

This week’s column started in one place and ended up somewhere quite different. I was interested in HMRC’s publication on the costs of tax reliefs (tinyurl.com/yxwbcs5g), in particular the section comparing the actual cost of reliefs with the original estimate. The one which stood out was the marriage allowance, where the cost is roughly two-thirds of the original estimate. Given that the number of couples and their earnings level were known, the shortfall must be due to low take up. Why was this? 

I did a search to see how easy it was to find out about the relief and apply for it. GOV.UK material came up, but only after advertisements for claims companies. I answered four simple questions, the pound signs started whirring and I was told I might be eligible for a refund of £1,187. The HMRC site has the same questions but presented in a more official looking, less glitzy way with no indication of the amount I might get. If I were a lay person I am sure I would have gravitated towards the advertisers’ sites. But, had I done this, I would have ended up paying a fee for something I could have done almost as easily and for free on the HMRC site. These are not trivial sums either: one site was charging 35% plus VAT of the refund. 

We have a free market economy and if people want to pay somebody to interact with HMRC on their behalf they can do so – after all most readers of this magazine make their living doing precisely that. But these sites make me uncomfortable. People should not need to pay to obtain the allowances they are entitled to. Perhaps HMRC should make their application process look less formal – but something needs looking at here. What do readers think?