Regarding tax refunds, we get asked ‘why’re you so expensive’ quite alot.
Well, if you’re thinking this, it’s worth looking at what options you’ve got, apart from using us.
First option for a tax refund
You contact HMRC yourself about your tax refund. This involves ALOT of hoopla, time on the phone, and sending stuff back and fro with each other.
Second option for a tax refund
You use a high street accountant. They’ll charge you £100 – £150 per hour and you’ll have to pay this even if you don’t get a tax refund. If your case gets complicated, or HMRC asks them lots of questions, or loses your file and asks your accountant to resend it (which they’ve been known to do over and over again), you’ll end up paying your accountant loads of money! There’s no way of knowing how much it’s going to cost you until you’ve reached the end of the process, and by then it’s too late! It could easily turn out to be very expensive, and there’s no guarantee you’ll get a refund!
Third option for a tax refund
You do nothing. During 2013-2015, 37% of the reviews we finished ended up with a tax refund, so if you look at that another way, by doing nothing there’s a 37% chance you’ll lose all the money HMRC owes you. That’s the same as paying 100% of your refund to HMRC.
Now that’s really expensive!
Fourth option for a tax refund
Use another company for your refund.
If you want to do this, here’s a couple of useful tips…
Tip 1 – Check for hidden charges. You may have to read the “small print” very carefully to find these charges.
Tip 2 – Check they’re not cherry picking or specifically looking for the big refund cases. If they quote average refunds of over £400, they are. Unless you’re likely to be due a large refund, these firms often find a way not to deal with your case, simply because it’s not worth their while for a lower percentage. They probably won’t say, “you’re not due anything”, but they’ll try and give you that impression. If you’re due a refund and they don’t get it back for you, you’ll probably lose the whole lot. That’s exactly the same as paying a fee of 100%!
Tip 3 – Check they’re not getting you to send your own claim direct to HMRC but making it look as if they’re doing it for you! (They’ll be telling you to send your paperwork to an address with the post code BX9 1AS which is HMRC.) Of course they won’t tell you they’re doing this because they want you to think they’re actually doing some work for you to justify their fee. It’s a very easy trick to miss if you don’t know what to look for, especially as it will be very well disguised. It has all the same risks we talk about in Question 16, with the added risk you’ll pay a fee as well. Apart from the fact you’ll pay them over 20% of your refund, plus a cheque handling fee for doing nothing but letting you download a pack of forms to fill out with some instructions on how to do it, you could end up facing serious problems with HMRC, which you will have to sort out on your own, or pay an accountant to sort out!
Tip 4 – If their website says that they’re members of an “Association”, or “Scheme” designed to protect you or your refund, do some proper background checks into the Association or Scheme. It’s probably not what it appears to be! Also, check the members of that Association or Scheme to see if they’re actually linked to each other, owned by the same people, or even exist! There’s at least one such organisation that several companies are still advertising on their websites, despite the fact it was closed down over 3 years ago!
Tip 5 – Check their “small print” doesn’t say that if HMRC says you have underpaid tax as a result of them making a claim, the company does not accept liability or that it is up to you to sort it yourself. It may not be worded as simply as this, but if you spot wording along these lines, it’s a good indication they’re just making claims for allowances they think you’ve missed out on. If they’re not doing a FULL review of your tax codes for the last 4 years, they could easily send in a claim when you actually owe more tax and they wouldn’t know, which is why their small print is designed to protect them and make it your problem to sort out if they get you into a mess. It could be a very costly problem!
There’s a number of very good reasons why we’re the “Approved Provider” for Trade Unions such as the NUT, ATL, UTU, RMT, & USDAW, professional bodies such as The Society of Chiropodists & Podiatrists, Association of Optometrists, Royal College of Nursing, as well as Local Authorities, Police Federations and major employers.
Ultimately, like most things in this life, you’ll get what you pay for.
If you want to see if a firm is legit or not, try checking with Action Fraud at http://www.actionfraud.police.uk/