tax refund company fee?

Bekki150

Hi i just have a couple of questions regarding the tax refund company. My partner just recieved a rebate from this company with hmrc sending the cheque directly to my partner which the company says shouldnt have happened as they say it should be sent to them. I have read a few previous posts regarding this company and i am now very dubios of them. The company have yet to send an invoice for their fee. I want to know if we acrually are legally required to pay this or if anyone knows what would happen if we dont pay it? Ive read posts saying that any refunds issued through this company arent acrually correct is that trie? any advice would be great

Pennywise

If he's instructed the company to reclaim tax for him, then he's liable to pay their fees as outlined in whatever agreement or T&Cs he signed up to. They wouldn't have been able to deal with HMRC directly without his agreement, so there is a contract in place. If you don't pay, then they'll be able to persue him through the courts.

Whether he needed to go through them or not, or whether he could have got the same service cheaper, is irrelevant. He made the decision to use them and now has to stick with his decision.

le_loup

It's strange how people continue to use these companies when there is so much free advice around. It's even stranger how people then feel that they don't need to pay when they have signed up to an agreement which says: "If we do the work, we will make a charge".
Would they go into Tescos, take some biscuits, then say: "Do I need to pay?"

Bekki150

le_loup wrote: »

It's strange how people continue to use these companies when there is so much free advice around. It's even stranger how people then feel that they don't need to pay when they have signed up to an agreement which says: "If we do the work, we will make a charge".
Would they go into Tescos, take some biscuits, then say: "Do I need to pay?"

He went to the company as he was advised by his union unite that it was a really good idea as its really difficult to do he was not aware he was able to do it himself he was misled. And i only asked if he had to pay as there have been lots of stories its not a legit company so wasnt sure if he had been scammed or not hence the question. If ur not going to give advice or say anything useful dnt bother posting

PlutoinCapricorn

Bekki, this subject has come up many times on MSE, and people agree that it is a disgrace that unions recommend these companies: apparently they are paid to do so.

Some people check in advance before signing up, others just tell everyone they know not to use them. If someone is happy to pay the percentage, and knows that they could do it themselves, then fair enough (although it is best to do it yourself) but telling you that this is the only way to get the refund is wrong. I wonder if this would be grounds for not paying? After all, it is natural to trust your union, and we are not born knowing about tax refunds.

I know a teacher and dentist who have done their own claims. I tell them to tell all their colleagues to do it themselves and complain to their unions.

Mikeyorks

You did post this initially - did you not?

My partner just recieved a rebate from this company with hmrc sending the cheque directly to my partner which the company says shouldnt have happened

...... so if you went through them - and the union (stupidly) recommended them. How can they be 'scamming' when you had a refund which they applied for. And how can you be asking the question ' do we have to pay them'?

What would you think the answer is? And as the Union is getting backhanders from the trade they give them - the pressure for you to pay may not just come from one direction.

jem16

PlutoinCapricorn wrote: »

I know a teacher and dentist who have done their own claims. I tell them to tell all their colleagues to do it themselves and complain to their unions.

I did this recently with my teacher colleagues when the headteacher sent round leaflets from a similar claim company who wanted £40 to do it for you.

Most have followed the advice I gave them to DIY and have recently been receiving cheques from HMRC for around £200 each. Strangely enough, although on the same wage and the same union and professional fees, the refund amount varied.

Typical of HMRC though the cliams were handled differently for all of them. Some got the tax code changed and a refund for this year and told to write for the previous 5 yrs. Some were given a refund for 3 years and told to write for the other 3 years. One had their tax code changed to give the refund instead of a refund cheque - she wasn't so happy as she would have preferred a cheque but HMRC wouldn't change it.

It probably would help people avoid these claim companies if HMRC adopted the same procedure for everyone but it seems to depend on who answers the phone.

2/3 decided they would rather pay the £40 to the refund company as they said it was too much hassle to collect the info needed and then to phone HMRC. They said they wouldn't have bothered to claim if they had to do it themselves so they were happy to pay the £40.

Bekki150

Mikeyorks wrote: »

You did post this initially - did you not?



...... so if you went through them - and the union (stupidly) recommended them. How can they be 'scamming' when you had a refund which they applied for. And how can you be asking the question ' do we have to pay them'?

What would you think the answer is? And as the Union is getting backhanders from the trade they give them - the pressure for you to pay may not just come from one direction.

I have read on other posts regarding this company that the refunds they apply for arent correct and when HMRC find out they will pursue u for the full refund eben though tje company recieves 40% hence why i wondered if it was a scam. I certainly dont want HMRV pursuing my partner for it back if the initial claim was wrong. He is planning on paying rhe fee as obviously doesnt want to get invovled in court proceedings but is just worried it is a scam

Mikeyorks

Then post some of the detail (did you get a P800?) on here and someone will check it out for you. Also the detail from his P60 for the same year (Pay / Tax / Code number).

If you completed a 64-8 to the refund company? That effectively authorises them to act as your Agent :

http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?formid=14&record=cZuAgB_KEpk

Best to contact HMRC if that is the case and get the authority withdrawn. As some of the refund companies are alleged to have contacted HMRC to get allowances withdrawn for future years. In order you're then due a further refund - and they get cyclical repeat business.

PlutoinCapricorn

I do understand why some people are happy to pay 40% for someone else to do all the work, but it is very important for people to understand how income tax and refunds work. The employer/HMRC do not always work together, and they rely on the employee to give them relevant information; the taxpayer is anyway ultimately responsible for their tax affairs. It is a pain, but I would say a necessary one.

I would estimate in advance the amount to be repaid, and query it with HMRC if there is a difference.

Perhaps it is necessary to mention in the covering letter that a cheque is required.

Bekki, the tax refund scams usually involve someone sending an email and asking for your bank details. This is not the same as these companies that the unions recommend.

dzug1

jem16 wrote: »

I
2/3 decided they would rather pay the £40 to the refund company as they said it was too much hassle to collect the info needed and then to phone HMRC. They said they wouldn't have bothered to claim if they had to do it themselves so they were happy to pay the £40.

And teachers claim to be underpaid?? And surely it's the same amount of hassle to collect the information for the refund company?

I think we need financial education for teachers before it can be taught in schools or it will be a complete waste of time.