Have I lost all of my tax refund?!

ds383

Hi all, I was due a refund of 700 odd but HMRC have sent the cheque to a company called 'Tax Refund Limited. I applied for a uniform tax rebate a few months back via that company thinking it was a legit HMRC company only to find it its a third party business that takes about 40% in fess. I wasn't expecting this company to be sent my cheque. I've tried contacting the company but they don't answer the phones. Will this company actually send me my refund or have I been screwed? I'm really confused.

TadleyBaggie

If you use a 3rd party company to "handle" your tax affairs, HMRC will assume that this company is now working on your behalf for all ongoing tax matters and as you have found out they will be sent any refunds. Expect the company to send you your refund less their commission.

ds383

Thanks, just glad I'll get some of it back. Gonna read the small print from now on!

Dazed_and_confused

It all depends on the forms you signed with your tax agent/representative.

It is often (always?) on a tax year basis so if you signed to say any tax owed for say 2018:19 tax year should be repaid to your agent and the £700 refund is for 2018:19 then they are entitled to keep 40% (+ VAT?) and HMRC were correct to send the refund to them in the first place.

etienneg

I just don't understand why anyone uses such a third party company. Go direct to HMRC web site; it's no more difficult to do that and there's no possibility of it costing a fee.

From where you are now, though, the important thing is to cancel your association with this company in the eyes of HMRC, by contacting HMRC directly.

EdSwippet

etienneg wrote: »

From where you are now, though, the important thing is to cancel your association with this company in the eyes of HMRC, by contacting HMRC directly.

Agreed.

I don't know why working with HMRC through an accountant or other intermediary is so 'sticky'. I had one of the big-4 accounting firms do my self assessment for one hugely complex year (international relocation), but then never used them again and instead did all my own tax returns from then on. A full seven years later, HMRC mailed a query to both me and them.

Only then did I realise that I had to affirmatively sever the connection from HMRC to them, otherwise it just sat there invisibly on some HMRC database. No harm done in my case, but I can see how this could easily be financially damaging in other circumstances.

unholyangel

Deed of assignment is a little different from appointing an agent (which is what an accountant acts as in law). Deed of assignment you are assigning a right of yours to someone else. You can only ever assign a right you actually have - so you cannot assign the right for future years because it doesn't exist yet.

What you're assigning depends on the wording of the deed. Sometimes its for all repayments due for allowable years, sometimes its just for specific repayments (such as those for uniform allowance or specific years).

You can't revoke a deed of assignment without the agreement of the other party - because you have bestowed that right upon them by deed, a legally binding document.

I do agree they're cretins though. The real issues arise when HMRC receive new information which means you didn't pay enough tax for that year - because you're the one who is liable to repay it, not the "claims management" company.

Cook_County

Complain to your MP. It is a scam that high volume refund companies can trade at all without being qualified to advise on tax and charge contingent fees. Parliament needs to step in.

laticsforlife

unholyangel wrote: »

Deed of assignment is a little different from appointing an agent (which is what an accountant acts as in law). Deed of assignment you are assigning a right of yours to someone else. You can only ever assign a right you actually have - so you cannot assign the right for future years because it doesn't exist yet.

What you're assigning depends on the wording of the deed. Sometimes its for all repayments due for allowable years, sometimes its just for specific repayments (such as those for uniform allowance or specific years).

You can't revoke a deed of assignment without the agreement of the other party - because you have bestowed that right upon them by deed, a legally binding document.

I do agree they're cretins though. The real issues arise when HMRC receive new information which means you didn't pay enough tax for that year - because you're the one who is liable to repay it, not the "claims management" company.

HMRC system will not hold a deed of assignment in that way (as far as I know there is no such 'box'. What it will have is that Company down as authorised Agent,so OP should contact HMRC and sever that arrangement, and ensure each notice to file comes to them directly, so they can do their own tax return and fill in their bank details in the boxes that ask where to send any refund.

What they gonna do, sue them, doubt it!

40% - disgraceful, theft!:mad:

unholyangel

laticsforlife wrote: »

HMRC system will not hold a deed of assignment in that way (as far as I know there is no such 'box'. What it will have is that Company down as authorised Agent,so OP should contact HMRC and sever that arrangement, and ensure each notice to file comes to them directly, so they can do their own tax return and fill in their bank details in the boxes that ask where to send any refund.

What they gonna do, sue them, doubt it!

40% - disgraceful, theft!:mad:

The cynic in me says if they're entered as an agent under deed of assignment, its because the HMRC staff member dealing with it doesn't understand that they are legally very different beasts, rather than because there isn't a box for it

Agency you are allowing someone else to act on your behalf.
Assigning you are transferring your right to them - to claim on their own behalf, not yours.

Norman_Castle

samried wrote: »

If we want to share some knowledge, first time we think in our mind what to tell, the second time we actually explain them, so it is a double bonus for refreshing our knowledge. Thanks for sharing.

Thank you for your 5 posts thanking people. Thank you.