Several years ago, I was awarded a payment protection insurance (PPI) refund on some money I borrowed. I received the cash, which was a pleasant surprise, and moved on with my life.
But in June 2022, the claims company that handled that refund contacted me again. It said that HMRC had deducted tax from that PPI payment years ago, and that I was entitled to claim that back, too.
It put me in touch with another claims firm called Brooksdale, who it said could handle the claim for me, so I gave it all the relevant information.
Tax trouble: Our reader was told by Brooksdale she would have her money in 12 weeks, but it has now been 15 months… and she is chasing HMRC herself (stock image, posed by model)
Brooksdale said the process would take 12 weeks, but it has now been 15 months since I first submitted the claim and the money is still not paid.
This is made worse by the fact I have since discovered Brooksdale will be taking a large cut of my refund, in exchange for this shoddy service.
I accept there may have been delays at HMRC, so I contacted it earlier this year and was sent a letter dated early June 2023 which stated that it had already sent a cheque to Brooksdale.
I am self-employed and my accountant says he can see that I have received an HMRC rebate and the amount. Where is my money? Anon, via email
Helen Crane of This is Money replies: I’m glad you contacted me, as it’s an opportunity to warn people about tax rebate agents and their unscrupulous practices.
As we reported last week, some customers report getting a letter from a tax rebate firm saying they are seeking a refund from HMRC on their behalf, without even realising they had given them the authority to do so.
They also charge hefty fees for their work.
In Brooksdale’s case, it takes a huge 48 per cent cut of any money it wins back for customers. This is sadly not uncommon.
CRANE ON THE CASE
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There are as many as 200 of these companies, and they are used by around 500,000 taxpayers every year.
And it is all to get refunds that customers could have got themselves, without paying a penny.
Here’s how. You can find out how much tax was deducted from your original payout, and therefore how much you might be owed, by looking at your PPI statement or documentation from the company that handled your original claim.
For most people, it is then simply a case of filling out an R40 form on the HMRC website, or printing it off and posting it.
Explain that you are claiming a refund on tax paid on a PPI payout, and any other relevant details, in the ‘other information’ section.
Don’t be thrown by the fact the form is for refunds on tax paid on savings and investments. Tax paid on interest accrued on a PPI refund is counted as savings income for HMRC’s purposes.
However, this does mean that, if you already earned interest from other savings in the year you got the rebate, you might have used up your personal allowance and not be due any money back.
So what about your case? As Brooksdale has already done the work for you, it is sadly too late to avoid its charges – but given you are paying so handsomely for its services, you are understandably angry that the process has taken so long.
Tax back: Our reader was eligible for a refund from HMRC, as it deducted tax from her payment protection insurance (PPI) rebate that she didn’t owe
When you first contacted the claims firm in early June 2022, you were told the money would be with you within 12 weeks.
But your accountant was able to check when the claim was filed with HMRC, and saw that this didn’t happen until September – 13 weeks later. When you contacted me, you had been waiting for 15 months, and still nothing.
Thanks to the information provided by HMRC and your accountant, you know that you are due a sum of £712 – though after Brooksdale’s fees and charges you would only receive about £340.
You told me you have spent hours on the phone and sent numerous emails, to no avail. You are almost 80 and say this has proved stressful.
You have also done some detective work with HMRC – which you find irksome as this is what you are paying Brooksdale for.
Through this, you discovered that the cheque was sent to Brooksdale at some point before June 2023.
But the last time you spoke to Brooksdale in August, it simply said it didn’t have the cheque, that it would speak to HMRC again and that it would take six weeks to get an answer.
You also think that the company’s fees might have increased since you initially got in touch.
Big slice of the pie: Tax rebate agents often take a large chunk of any money they get back for their customers. In Brooksdale’s case, it charges a 48% fee
I contacted the firm to ask where it was. It didn’t reply to me directly, other than a generic message saying it was experiencing delays in its ‘information-gathering’ due to the August bank holiday.
But a week later, you got in touch to say you had finally received the cheque.
The firm also told you to inform ‘that journalist’ – in other words, me – that the situation was sorted. Again, leaving you to do the legwork.
Brooksdale offered you some compensation for the delay, but on the condition that you didn’t discuss the details with me.
I’d have preferred a personal response from Brooksdale – and the chance to ask some questions.
But nonetheless, I’m glad the money you are owed is now safely in your pocket. At least, 52 per cent of it.
CRANE ON THE CASE
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