TAX REPAYMENT COMPANIES

WHO AUTHORIZES TAX REFUNDS TO TAX REPAYMENT COMPANIES

Didn't find your answer?

A taxpayer (not a client) living locally received a notification of a refund from HMRC that was sent to a tax repayment company.  HMRC have sent to him a copy of R40 claiming refund of interest deducted from savings (2019/2020).  As this firm is based 100 miles + from the taxpayer my question is how do they get access to these taxpayers, and incidentally the taxpayer says that he never authorized anybody.  I note that Brooksdale tax Repayment firm have collapsed and taxpayers are asking why HMRC made repayments to this firm who have responded that the taxpayer authorized the refunds to go to theses firms, but from the evidence that I have seen there is something completely out of synce.  I contacted the Tax repayment firm and he said that nothing to do with them but when I googled Companies House he is a director of the tax repayment firm!  Advice as to how best to proceed.

Replies (12)

Please login or register to join the discussion.

By K81
23rd Apr 2024 13:19

from what i have seen some people who paid firms to apply for their PPI claims are now having the same firms apply for the tax paid on interest paid on PPI to be refunded too. The initial paperwork signed for the PPI claim still stands.

Thanks (0)
Replying to K81:
avatar
By paul.benny
23rd Apr 2024 14:15
Thanks (1)
avatar
By bigmuggsy
23rd Apr 2024 13:33

One of our clients received a completed R40 back from HMRC recently, they never filled it in originally, a company called Waltonbridge done it (fraudulently).

We notified HMRC who updated the clients file and also advised us to make a report with Action Fraud UK.

Thanks (0)
Replying to bigmuggsy:
avatar
By philomena
23rd Apr 2024 13:52

So who signed the R40 - Presumably signed fraudulently?

Thanks (0)
Replying to philomena:
avatar
By bigmuggsy
23rd Apr 2024 14:47

Yes someone else pretending. Looks nothing like their signature either!

Thanks (0)
avatar
By FactChecker
23rd Apr 2024 13:39

Leaving aside that you really shouldn't advise someone who isn't your client (if you're not qualified to do so that's presumably obvious, but if you are then you are risking your business) ... but what is that (you think) the affected taxpayer wants?

- If they're saying that the claim wasn't true, HMRC will likely want reimbursement of the whole claim (including the amount retained by the agent) from the taxpayer!
- If they're saying the claim was correct but they want the amount retained by the agent, then that's a legal dispute between them and the agent.

What do they want to achieve?

Thanks (2)
Replying to FactChecker:
avatar
By paul.benny
23rd Apr 2024 14:15

On point as always.

Thanks (1)
Replying to FactChecker:
avatar
By philomena
23rd Apr 2024 16:15

The point is if the tax repayment company have fraudulently submitted an R40 claim (which I need to establish - as he is now a client and the signature on R40 he states is not his) then HMRC need to pursue this (I also need to verify the savings interest from which tax was deducted and formed the basis of the repayment) as my client states that he never received any savings interest - so I shall ask for documentary evidence to support the tax deducted. What concerns me is the lack of due diligence from HMRC as this is a scenario they are apparently aware of and extra checks should be made if the refund goes to these companies as it is after all taxpayers money being paid out fraudulently?

Thanks (0)
Replying to philomena:
avatar
By Not Anonymous
23rd Apr 2024 17:27

philomena wrote:

The point is if the tax repayment company have fraudulently submitted an R40 claim (which I need to establish - as he is now a client and the signature on R40 he states is not his) then HMRC need to pursue this (I also need to verify the savings interest from which tax was deducted and formed the basis of the repayment) as my client states that he never received any savings interest - so I shall ask for documentary evidence to support the tax deducted. What concerns me is the lack of due diligence from HMRC as this is a scenario they are apparently aware of and extra checks should be made if the refund goes to these companies as it is after all taxpayers money being paid out fraudulently?

An R40 in the situation you describe is unlikely to involve traditional "savings interest".

It will be the statutory interest paid (and taxed) as an element of a PPI refund.

Of course whether your client actually received such a payment could well still be a no.

Thanks (0)
Replying to philomena:
avatar
By FactChecker
23rd Apr 2024 18:04

You appear to be ignoring my advice (re not advising your 'local taxpayer who isn't a client') ... so for the avoidance of doubt, I wasn't being pedantic or flippant but really serious.

But per your update:
* "if the tax repayment company have fraudulently submitted an R40 claim .. then HMRC need to pursue this".
That would be ideal, but what are you proposing to do in order to inform them?
You say you're not the taxpayer's agent - so do you have PoA for their finances?
If neither then HMRC won't be interested in anything you say ... and, as I hinted earlier, if you tell the taxpayer what to do and that backfires in any way, then you are on the wrong end of a potential legal action.

* "I also need to verify the savings interest from which tax was deducted .. so I shall ask for documentary evidence to support the tax deducted"
Whom will you ask for this? And with what authority (see above)?

FWIW "What concerns me is the lack of due diligence from HMRC as .. extra checks should be made if the refund goes to these companies?"
You are here making the common mistake of confusing logic/common sense with any element of HMRC's philosophy and procedures.
Whatever your opinion (with which most people may well concur), the fact is that HMRC decided a long time ago that it was 'more efficient' for taxpayers if HMRC treated claims as 'pay now, check later' ... even though that obviously leaves a large gap through which fraudsters gleefully rush.
The scale of that fraud during Covid has eventually come to the notice of HMRC ... so they are slowly changing their policy to 'check now, pay later' - which is why you'll see all the complaints from people waiting for their repayment many months after putting in the claim.
And along the way, they've (finally) tightened up some specific areas (like R&D TCs) and restricted some of the options previously available to Repayment Agents ... but those seem to have arrived too late for your taxpayer.

As I said in my previous response ... what is that (you think) the affected taxpayer wants?

Thanks (2)
Replying to FactChecker:
avatar
By paulwakefield1
23rd Apr 2024 18:13

Ummmm - "....as he is now a client ...." (@ 16:15)

Thanks (1)
Replying to paulwakefield1:
avatar
By FactChecker
23rd Apr 2024 18:56

Hands up, I missed that ... though if people don't respond to large issues raised in earlier posts and then slip 6 words within parentheses into the middle of a sub-clause of an update post, it's not surprising if those words are missed.
But I am usually more thorough, so mea culpa on that aspect.

However, on the core issue (as per 2nd half of my post), what is it that the taxpayer actually wants to be done (beyond a vague and natural sense of unease that wrong has been done and so something should be rectified)?

Thanks (2)