We asked readers to expose the shady firms that pocket a chunk of your tax refund (Got high blood pressure? Look away now)
Money Mail can today lay bare the devious tactics used by rebate firms to prey on unassuming taxpayers.
These unregulated companies operate with impunity — charging huge fees for tax refunds that customers could have claimed for free.
HM Revenue & Customs (HMRC) has finally pledged a clampdown and last month launched a consultation aimed at eliminating widespread, concerning practices. But it could be many months before any action is taken.
Unregulated companies operating with staggering impunity are charging huge fees for valuable tax refunds that customers could have claimed for free
In the meantime, these firms continue to shamelessly exploit online platforms to snare around 500,000 taxpayers every year.
We can also reveal the advertising watchdog is now so concerned about misleading tactics it is poised to launch its own investigation.
Last week we called on readers to share their experiences so we can submit a dossier to the taxman.
We were inundated with emails and letters — and your evidence of how firms target taxpayers is damning. Our investigation reveals how unscrupulous tax agents:
- Pay for adverts to appear above HMRC’s official website on major search engines.
- Flood social media sites with misleading questionnaires that tie customers into iron-clad contracts.
- Charge punitive fixed fees that can see taxpayers receive as little as £6.69 of a £218 refund.
- Wrongly claim people have signed contracts and use signatures from old claims without their knowledge.
- Bury crucial information about hefty charges within reams of confusing small print.
- Hound customers with demands for payment and threaten court action.
- Refuse to pass on refunds and ignore customer calls and emails.
Scores of tax rebate firms pay to promote their services online via search engines and on social media. When Money Mail typed ‘claim tax refund’ into Bing, the top four results listed — above HMRC’s own website — were for third-party firms.
One agent, Fast Track Reclaim, charges a fee equivalent to 36 per cent of any refund claimed.
After searching for these firms, our social media accounts were soon flooded with more adverts. Many ads are masquerading as questionnaires that customers can use to find out if they are eligible to claim.
But we have heard from readers who discovered they had been locked into a contract without their knowledge after filling them in.
Some companies also use branding that bears an uncanny resemblance to government websites. One Facebook advert uncovered by Money Mail used the same green ‘claim’ button as the official gov.uk site.
The firm in question, My Money Back, run by Ropto Ltd, was promoting ‘work from home’ tax relief.
Short changed: Sylvia Windows received a miniscule £6.89 of her £218.43 marriage tax allowance rebate
It asked customers which years they worked through Covid and invited them to select one of three options. Anyone claiming a refund through the site would pay a 48 per cent fee.
Meanwhile, Salford-based Brooksdale Ltd, features a happy customer on its website, named ‘Judith Black’.
But Money Mail has found the same image being used online to promote dental clinics. These examples have been referred to the advertising watchdog.
The Advertising Standards Authority (ASA) confirmed it is investigating another advert on the grounds it was falsely implying it was a government service. The regulator will launch a special project to tackle the wider issue of claims firms.
An ASA spokesman adds: ‘We’re in close discussion with HMRC on this issue and are aiming to launch a proactive project later this month to tackle misleading ads of this nature. As part of that, we will consider the examples Money Mail has sent us alongside other examples we’ve been collecting.’
In the meantime, readers can report deceptive adverts to the regulator by calling 020 7492 2222.
HMRC adds that it has seen incidents of claims firms using its logo, a breach of crown copyright.
Failing to show their terms and fees prominently is a fundamental flaw among rebate firms.
In some cases, the details of punitive charges are buried in thousands of words of small print.
HMRC itself found there was ‘strong evidence’ that many taxpayers ‘do not understand the terms they are signing up to’.
Some firms also lock customers into contracts that allow them to claim refunds for up to four tax years. One firm, Tax Returned Ltd, claims to have won customers £11.5million since it launched in 2014.
Crackdown: HM Revenue & Customs last month launched a consultation aimed at eliminating widespread, concerning practices
A Facebook advert for the firm directs customers to an online form, which takes just a few minutes to complete. However, there is no mention of the fact it will pocket the greater of £60 or 28 per cent of any refund owed, plus VAT, until the final page of the form.
Even then, this information is in a pale grey font on a grey background which could be all too easily missed.
On the same page, it states customers are committing to the firm carrying out a ‘yearly check’ to determine if they have overpaid tax.
It will then take a chunk of any valid claim in these future years.
Tax Returned says its fees are set out clearly and it is impossible for a client to submit an online application without ticking a checkbox agreeing to them.
Meanwhile, some firms only display fees if customers click through to a separate webpage. On one site, workingfromhometax relief.uk, which belongs to Total Tax Claims, you need to scroll to the bottom of the page and select ‘pricing’ or ‘terms’.
Under ‘terms’, customers would find a 1,668 word document. My Money Back buried fee details in 4,000 words of small print.
HMRC has no plans to limit the fees charged by rebate firms. However, some are so high they can strip away more than half the original payout.
This is because some refunds are relatively small but many firms charge minimum fees as high as £120.
Others charge seemingly arbitrary ‘admin fees’ on top. Brooksdale Ltd and Victor Hydon Ltd, which trades as Your Claim Matters, both charge a £12 ‘admin fee’ after taking 48 per cent of customers’ payouts.
In this scenario a taxpayer due a £150 refund would only receive £66 if they used the firm to make a claim.
Tax Returned advertises a minimum £60 fee, leaving a taxpayer with £40 out of a claim worth £100.
Shady tactics: Rogue firms are paying for adverts to appear above HMRC’s official website on major search engines
Money Mail reader Sylvia Windows received just £6.69 of her £218.43 marriage tax allowance rebate from firm Mortgagesmiths Ltd.
The 66-year-old grandmother of one, from Rothwell, Northamptonshire, says she was unaware that the firm would pocket 42 per cent of any refund plus a £120 administration fee.
She does not remember signing a contract or seeing any terms and conditions. ‘I was in absolute shock,’ she says. ‘These companies are definitely taking advantage of people’s vulnerability at the moment. I’m just so angry about it.’
Beryl Gevaux was ‘floored’ when she realised how much she had lost.
The 82-year-old grandmother of six, from East Sussex, had made a claim for missold payment protection insurance (PPI) with agent U Claim 4 Me in 2019. She was charged 20 per cent of the compensation paid plus VAT, which came to £168.
After being bombarded with letters and emails from the same company informing her she could also be owed a tax refund on her PPI payout, she agreed to make a claim and assumed the fees would be similar. Instead, she received just £368.61 of her £731.94 refund.
‘I expected to pay something for the service, but I did not expect that’ she says. ‘I was gobsmacked.’
Several worrying reports have come from readers claiming they have been sent contracts they do not remember signing.
When challenged, firms provided documents with signatures that are unrecognisable to those who have supposedly supplied them. Derek Ansell, 73, from Clacton-on-Sea, Essex, says he did not recognise the signatures used on a contract with Total Tax Claims.
He says his signature used the wrong initials for his name and his wife Linda’s looked nothing like how she usually signs her name.
Derek Ansell was due a £960 marriage tax allowance but was paid just £460.67 after falling foul of a rebate company in September 2021
‘It stunk from start to finish,’ he says. ‘I question everything now.’
Total Tax Claims pocketed 40 per cent of his refund plus a £100 fee — £460.67 of the £960 owed. A Total Tax Claims spokesman says it had received a completed online application from the couple, and that it was done electronically which explains the discrepancy with the customer’s signature.
In some cases, it is suspected agents access signatures via affiliate companies linked to previous claims.
This is what happened to David Curtis, who received a letter from HMRC saying he was owed a £31.17 tax rebate for the financial year ending in 2019 — but the cheque would be sent to Brooksdale Ltd.
The company name was completely unfamiliar to the 68-year-old from Treherbert, Wales. The firm emailed asking for his national insurance number and date of birth. David was so concerned he contacted HMRC’s fraud department.
After Money Mail got in touch, Brooksdale Ltd contacted David.
The company explained he had made a PPI claim with their affiliate company The Claims Guys, which is how they had his information.
David says he does not remember agreeing to his details being shared.
He refused to provide his online banking details, so the firm agreed to send him a cheque for £16.21 —after taking a cut of 48 per cent.
A Brooksdale spokesman says it cannot comment on individual cases. But he acknowledges the firm has a number of partnerships with claims management companies which refer customers.
David Curtis was due a £31.17 tax rebate, but was paid: £16.21 after Brooksdale Ltd took 48%
Alternatively, customers may have been asked to provide an electronic signature as part of an online application.
This is then replicated on a contract, which in many cases the taxpayer has never seen.
Meredith McCammond of the Low Incomes Tax Reform Group (LITRG) says: ‘People may think they are just giving their signature as part of the process of applying for a particular refund, but then that electronic signature is transposed onto other documents.’
She adds that there is ‘a serious question mark’ about whether documents created in this way are even valid and argues HMRC should not accept them.
One couple, who want to remain anonymous, say they were sent letters threatening legal action despite not making a claim.
They had entered their names, address and dates of birth into an online eligibility checker. But they later abandoned the enquiry and closed the website.
A few weeks later, they received a letter claiming they had broken their contract. The agent demanded the couple pay £300 or face court action. Yet when they asked to see the contract, they did not recognise the signatures.
Ms McCammond says LITRG has received reports of companies threatening taxpayers with legal action where the individual says they did not sign up for their services. ‘It is an extremely concerning state of affairs,’ she says.
Left in the dark
You have complained in your droves about struggles to contact rebate firms.
Some agents do not have a direct phone number to call, or trade under a multitude of different company names. And many of you say you have not received a penny of your rebate despite calling and emailing.
RAF veteran Geoffrey Restall waited for over a year for a marriage allowance tax rebate from Touchstone Consultants Group Ltd after applying in June 2021.
The 79-year-old pensioner from Wythenshawe even visited the company’s registered address in Manchester to get to the bottom of his missing cash.
He was told that it was just a satellite office and managers only visited once a week to collect post.
RAF veteran Geoffrey Restall waited for over a year for a marriage allowance tax rebate of £249
Although the company did then get in touch, he says they soon went cold on him and he had all but given up on the £249.20 owed.
A Touchstone Consultants Group Ltd spokesman says it had not received the money from HMRC but has paid Geoffrey the full amount as a gesture of goodwill.
Marilyn Duffield, on the other hand, has not received any of the £362 she is owed from a tax rebate offered to people working from home.
The 65-year-old from Tyne and Wear was shocked to discover the taxman already had a signed authority for a firm called Tax Credits Limited to claim on her behalf when she contacted HMRC. She says that she does not remember signing a contract or filling in an online questionnaire.
During the pandemic she was made redundant from her role as a business support administrator for a recruitment company. She says that the money would really help now she is approaching her retirement.
‘It is a worry,’ she adds. ‘That £362 would go a long way. I would never have agreed for a company to take half of what I am due.’
There are thought to be as many as 200 tax reclaim companies touting their services in the UK.
And firms highlighted by our readers are raking in hundreds of thousands of pounds a year.
Quickly Finance Ltd, which trades as Fast Track Reclaim, made a £656,195 profit in the year to February 2021.In the previous 12 months, it made £669,018.
Its founder and director Colin Hartness, 59, previously told a local paper he drove a BMW 7 Series four years after launching his business in 2010.
Meanwhile, Lancashire-based Claim My Tax Ltd boasts of securing tens of thousands of claims in the past five years. Tax Returned Ltd says it has claimed back more than 320,000 refunds in the eight years it has been operating.
However, in 2018 it was fined £200,000 by the Information Commissioner’s Office for sending 14.8 million spam text messages.