Used a tax rebate company (tommys tax) and I'm a bit concerned

helpmeplease124

Used a tax rebate company (tommys tax) and now I'm worried.. Hi everyone, First of all, I don't understand anything about taxes. I'm permanently employed and have not had to worry about it. My friend told me about an app she used to get a rebate for work expenses and said she had no problems with it, so I've used it too. I should be receiving my rebate this week, however I received a letter saying it is going directly to the tax company (and they will pay me after taking off their fee).

I found this a bit odd, so I've looked into this more and it seems they have put me under self assessment tax (so does this mean I will have to do my taxes myself every year or be heavily penalised? I don't know how to do taxes.. and not sure I want to use this app again) also does this mean they have the deed of assignment? I haven't agreed to this, I've agreed to let them act on my behalf for the claim for last two years but not for the future.

I've also received a letter saying my tax code has now changed and they have informed my employer. I don't really know what any of this means and I'm a bit worried I could get in tax trouble in the future if I don't do self assessments which I don't know how to do. Also not sure how they calculated the amount of rebate, but it seems more than I expected and the amount of the 2 years seems to be added on to my yearly tax free allowance changing my tax code, I think — not sure if that's right and if that puts me in trouble or not. Help would be greatly appreciated. 

k3lvc

Unfortunately the time to be worried was probably before you signed your life away to them

Tommy's Tax App - any good? — MoneySavingExpert Forum

I'm sure others will be along to give you ideas on how to extract yourself from it but Tommys representatives have been known to pop up on the boards so be wary of advice from new users

helpmeplease124

k3lvc said:

Unfortunately the time to be worried was probably before you signed your life away to them

Tommy's Tax App - any good? — MoneySavingExpert Forum

I'm sure others will be along to give you ideas on how to extract yourself from it but Tommys representatives have been known to pop up on the boards so be wary of advice from new users

Thanks. I've gone on to the government HMRC app and signed up, and it appears I'm still on PAYE and not self assessment so not sure what the letter I received before was about.

Seems like the worse that can happen is I'll pay back overpaid taxes? And if this assessment tommys tax is an overpayment, I will willingly pay back any excess. But I'm guessing (hoping) I can't get in any legal trouble or trouble with my employer. I mean all I've done is use an app, if I'm informed the calculation is wrong I will happily pay back whatever. Please correct me if I'm wrong.

comeandgo

You can be on self assessment and be an employee on PAYE.  If HMRC investigate you and there is a payback then you will have to pay back the amount Tommy’s tax got which will be a lot more than they paid you.

Dazed_and_C0nfused

I think you are missing a vital element.

Say the information the company you chose to use results in a tax refund of £3,000.

Based on the agreement you signed they keep say £900 (25% + VAT).  You get the remaining £2,100.

HMRC then ask questions about your claim(s) and decide none of them were valid.

You now owe HMRC £3,000 (plus interest and maybe a penalty).

You have £2,100 I'm the bank and pay that to HMRC.  But you also need to find a further £900 to pay to HMRC.

Or does the agreement you have signed say that your agent/accountant will give you their commission/fee back if HMRC later challenge things?

helpmeplease124

Dazed_and_C0nfused said:

I think you are missing a vital element.

Say the information the company you chose to use results in a tax refund of £3,000.

Based on the agreement you signed they keep say £900 (25% + VAT).  You get the remaining £2,100.

HMRC then ask questions about your claim(s) and decide none of them were valid.

You now owe HMRC £3,000 (plus interest and maybe a penalty).

You have £2,100 I'm the bank and pay that to HMRC.  But you also need to find a further £900 to pay to HMRC.

Or does the agreement you have signed say that your agent/accountant will give you their commission/fee back if HMRC later challenge things?

Thanks for raising this concern to me. It didn't specify, so I'm guessing they wouldn't, I have asked them to clarify though. They have just clarified to me that they will be returning my tax code to normal, so I will not be on self assessment for future and also that they do not have the deed to anything in the future either, only the claims for last 2 years that they have been involved in. 

So it seems worse case scenario I will have to pay back the whole rebate plus their fee? Obviously not ideal, but I can do that if it gets to that situation. I don't see why the whole claim would be invalid though, so it feels unlikely, more likely that it could potentially be more than I'm entitled to but that could just be me thinking of it anxiously and maybe it'll be fine.

But anyway, worse case scenario I can pay it and it will be an expensive lesson learned for not doing more research beforehand.  

Jeremy535897

You may be worrying more than you need to. Firstly, check just what you have signed up for. Are you sure it is just for past years? Check all the paperwork.

Whilst the amount they claim to save taxpayers on average seems large, it doesn't appear that they are in the same category as those who put in false claims for EIS investments never made, for example. If they are just claiming for legitimate expenses, there should be no question of paying HMRC back (although the percentage they take may be large).

Their target market is people who are either too busy (being charitable), or too lazy (being uncharitable), or too HMRC averse to do what is quite a simple process themselves.

helpmeplease124

Jeremy535897 said:

You may be worrying more than you need to. Firstly, check just what you have signed up for. Are you sure it is just for past years? Check all the paperwork.

Whilst the amount they claim to save taxpayers on average seems large, it doesn't appear that they are in the same category as those who put in false claims for EIS investments never made, for example. If they are just claiming for legitimate expenses, there should be no question of paying HMRC back (although the percentage they take may be large).

Their target market is people who are either too busy (being charitable), or too lazy (being uncharitable), or too HMRC averse to do what is quite a simple process themselves.

I am a worrier so that seems likely lol. Thanks so much for your reassurance, it seems likely it will be fine and if it isn't, it isn't the end of the world. I will check over all my documents as well. I think the amount seems larger than I thought as it also includes their fees.

sheramber

What have they claimed for to get the  refund?

Cook_County

I would complain to your MP. It is a scandal that Parliament allows unqualified tax reclaim companies to operate at all.

Jeremy535897

Cook_County said:

I would complain to your MP. It is a scandal that Parliament allows unqualified tax reclaim companies to operate at all.

Anyone can act as a tax adviser at present. There is discussion going on as to whether tax advisers should require professional indemnity insurance. See:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/972427/Raising_standards_in_the_tax_advice_market_professional_indemnity_insurance_and_defining_tax_advice_-_consultation.pdf