Sharp practice tax refund firms named to HMRC

Moneymail has submitted a file to HMRC's consultation on protecting taxpayers from unscrupulous revenue repayment claims companies. The paper said it named nearly 20 companies for dubious behaviour based on examples from readers.

HMRC launched a consultation, 'Raising standards in tax advice: protecting customers claiming tax repayments', at the end of June, looking for views on how they could legislate to protect taxpayers from the conduct of some unscrupulous tax repayment agents.

The paper's submission included a plea to HMRC to reconsider its decision not to include fees and charges as part of its investigation, "In the worst cases, the charges add up to more than the refunds are worth".

Moneymail reported that it received numerous complaints of cold callers, clients being threatened with court action,  debt collectors and being locked into contracts they had no recollection of signing.

The allegation of sharp practices against the companies include the following example:

• Online advert offers a 'free check', to find out if you are entitled to a marriage tax allowance refund, explicitly stating the service is free.
• A box appears saying "Good news. You could be owed £1200".
• Answering the following questions, should you have decided to continue, locked you into a 'legally enforceable' contract.
• Request for electronic signature and that you agree to terms and conditions, including a 4,500-word document that includes a £300 cancellation fee.
• Other companies use the harassing cold call route.

Consequences

• For those who didn't fill out the enquiry fields but ticked 'Terms and Conditions', they were chased for full personal details, for example, national insurance number, tax details and signatures of authorisation.
  • Those that didn't comply received demands for a £300 cancellation fee.
  • Non-payment resulted in court documents and threats of debt collectors.
• For those who did comply fully would find charges on any refund from HMRC would be as much as 35% plus VAT plus a £100 administrative fee.

Moneymail named several companies for, at best, misleading practices.

• Hidenda Tax Limited is a trading name for Harwood Claims Management Limited.
• Wyndan Group Limited which comes under the umbrella of financial services group Silkston Limited.
• Mortgagesmiths Limited.
• Brooksdale Limited.
• Tax Credits Limited and Ensign Advisory Limited, which also trades as Touchstone Consulting Group and Total Tax Claims Limited.

Useful guides on this topic

Appeals: Grounds for Appeal Toolkit
What grounds are there to appeal a tax penalty? How should you word a tax appeal? Can you appeal HMRC errors? What is a reasonable excuse? 

HMRC consult on repayment agent protections
HMRC have released a new consultation, 'Raising standards in tax advice: protecting customers claiming tax repayments'. It seeks views on ways in which HMRC can legislate to protect taxpayers from the conduct of some unscrupulous tax repayment agents.

External links

HMRC open consultation: Raising standards in tax advice: protecting customers claiming tax repayments

This is Money: Readers' stories that EXPOSE the tax rebate sharks