Tax Refund Company

naav

Hi everyone

I was wondering if anyone had any advice about the following:

I came across a note from the Tax Refund Company in my local authority payslip about employees being able to claim tax rebates as I had been paying tax on union and professional body fees. They said they would take a 39% cut from any rebate that I received. And that there would be no fee if I didn't receive any rebate. Thus I applied via this company. They then sent me a letter asking for my P60 and to fill out a form whilst still saying that they would take a 39% cut from any rebate I got which would be payed to them and they would send me the remaining amount.

After I sent them my annual P60, they sent me another letter saying that we would now wait to hear from the Tax Office. But they added in this letter that if, on rare occassions, the Tax Office changed my tax code, I would still be liable for the fee. I then called them up to say that I wasn't informed that there was a possibility that the Tax Office, instead of sending a rebate, would change my tax code to compensate for taxing my union and professional body fees over the last 5 years.

When I spoke to them on the phone, they told me not to worry, it's never happened and is unlikely to happen in such a way. Also that since I've signed a 'contract' and since they've done the paperwork, I would now be liable for their fees. Also, if it did happen they would try to tell the Tax Office to send them a rebate again.

Anyhow, I just received a note from the Tax Office saying my Tax Code has changed and it mentioned how my professonal fees (around £160 a year) would remain untaxed for the upcoming tax year. I assume because of this letter, they are not going to send out a tax rebate cheque.

Can anyone advise as I don't even know what their fees are and I can't afford to pay them as I just thought they would take their cut from the rebate the Tax Office sent them.

Thank you.

madgagoo

naav wrote: »

Hi everyone

I was wondering if anyone had any advice about the following:

I came across a note from the Tax Refund Company in my local authority payslip about employees being able to claim tax rebates as I had been paying tax on union and professional body fees. They said they would take a 39% cut from any rebate that I received. And that there would be no fee if I didn't receive any rebate. Thus I applied via this company. They then sent me a letter asking for my P60 and to fill out a form whilst still saying that they would take a 39% cut from any rebate I got which would be payed to them and they would send me the remaining amount.

After I sent them my annual P60, they sent me another letter saying that we would now wait to hear from the Tax Office. But they added in this letter that if, on rare occassions, the Tax Office changed my tax code, I would still be liable for the fee. I then called them up to say that I wasn't informed that there was a possibility that the Tax Office, instead of sending a rebate, would change my tax code to compensate for taxing my union and professional body fees over the last 5 years.

When I spoke to them on the phone, they told me not to worry, it's never happened and is unlikely to happen in such a way. Also that since I've signed a 'contract' and since they've done the paperwork, I would now be liable for their fees. Also, if it did happen they would try to tell the Tax Office to send them a rebate again.

Anyhow, I just received a note from the Tax Office saying my Tax Code has changed and it mentioned how my professonal fees (around £160 a year) would remain untaxed for the upcoming tax year. I assume because of this letter, they are not going to send out a tax rebate cheque.

Can anyone advise as I don't even know what their fees are and I can't afford to pay them as I just thought they would take their cut from the rebate the Tax Office sent them.

Thank you.

Tax is always in the detail and you haven't given quite enough for me to tell you exactly what's happened. However I would assume that your professional subs are about £160 per year, in which case your 2014/15 tax code is taking account of this. The code should be 1016L, if there's nothing else involved. This will give you tax relief for the forthcoming year's subs.

For previous years I anticipate that HMRC will send you a calculation and a lump sum repayment. This would (probably) be sent to the company doing your claim for you, they will deduct their 39%, and then the balance will be paid to you.

Whether or not you owe them for the 2014/15 tax year, depends on the contract you signed.

A final recommendation would be to let HMRC know you are looking after your own affairs and not the agent, otherwise any future refunds will be sent to them.

agrinnall

I'd be complaining to my employer, there is absolutely no need to use a third party to make this sort of claim, a simple phone call to HMRC would have done the trick at zero cost. Sounds to me like somebody is getting a backhander from TRC.

PlutoinCapricorn

This subject has been discussed many times before, and everyone agrees that it is a disgrace that these companies are recommended by the unions and employers - almost certainly in return for payments.

They try to tell you that it is too complicated to do it yourself, which is wrong.

I know a teacher and a doctor who make their own claims and tell their colleagues to do the same.

naav

Thank you very much everyone for the replies

The code should be 1016L,

Yes, that's correct. It's 1015L to be precise.

For previous years I anticipate that HMRC will send you a calculation and a lump sum repayment. This would (probably) be sent to the company doing your claim for you, they will deduct their 39%, and then the balance will be paid to you.

The TRC had said in their last letter that if HMRC change my tax code that I should contact them as I would still be liable for their fees. Should HMRC be now sending one of us a payment or will I have to pay TRC's fees out of my own pocket? Should I wait to see if I hear from HMRC or contact TRC to tell them about this tax code change. I'm anxious as to what their fees are

Thank you

naav

Hi everyone

Just an update: I got a letter from HMRC today along with my returned P60. It says that repayments for two of the last four years have been issued to TRC. The other two years (the middle years for some reason) "were too late to amend, therefore relief has been given as credits on the statement of account" (whatever that means!).

Thank you

Cook_County

What professional qualifications does your chosen tax adviser have? Can you make a complaint to whoever regulates your adviser? This will be set out in your letter of engagement.

naav

Hi everyone

I just got my percentage of the rebate from TRC via cheques. They've asked me for another P60 so they can claim for this year too. I looked at my agreement which I had signed. It said it was for the five years ending April 2014.

Am I obliged (legally?) to send them my P60 or can I just call and tell them that I wish to end this 'service' now as I don't want anymore rebate.

Thank you

jimmo

As your contract with TRC covers the 5 years ending on 5 April 2014 they are legally entitled to their 39% (presumably plus VAT) for 2013/14 regardless of how much work they do.
Whilst many contributors to this forum think you have been legally mugged it is probably practical for you to co-operate with them now, get 2013/14 settled as soon as possible and move on.
Once 2013/14 is settled and out of the way I would suggest you write to TRC to confirm that you no longer require their services but, far more importantly, write to HMRC to cancel your authority (which you will have signed) for TRC to act as your agents.

naav

Thank you

I contacted TRC today. They said they were requesting the P60 to check if I had the correct tax code for the next financial year. I explained I didn't want to continue with their service as they had their money now. They said they would put a note on the system that I wouldn't be sending in my P60 and that I wanted the case closed. I asked if I needed to speak to someone else or if I needed to write in - they said I didn't need to.

I would suggest you write to TRC to confirm that you no longer require their services but, far more importantly, write to HMRC to cancel your authority (which you will have signed) for TRC to act as your agents.

As TRC asked for my P60 in order to proceed further. Am I correct in thinking that they can't deal with HMRC on my behalf without me providing my P60. Otherwise they wouldn't needed to have asked for it and would've contacted HMRC without me knowing....

Thank you

jimmo

No. HMRC will continue to deal with any correspondence from TRC until you cancel your authority for them to be your agents.
Nowadays submitting the P60 is a bit dated because HMRC now operate “Real Time Information”. In theory at least HMRC should already have your P60 details and will be quite happy to share the information with your agents if they are asked.
If I were you I would still write to TRC to confirm termination of the arrangement but, still more importantly, write to HMRC.