Customers complain tax rebate firm has cost them thousands

theguardian.com:

Scores of taxpayers have been left out of pocket by up to £4,000 each after Her Majesty’s Revenue and Customs (HMRC) paid tax rebates they were owed to a third-party claims firm.

Tax Credits Ltd, which trades as Taxrebate.uk, posts what many have mistaken for official HMRC ads on social media stating that potential customers may be due rebates of overpaid tax worth hundreds of pounds, and inviting them to check their eligibility via its online form.

Many of those who responded claim they believed they were dealing with HMRC and didn’t realise that Tax Credits could take about 48% of any rebate due. All of those who contacted the Observer say they were unaware they had signed a binding contract that assigned all rebates over the past four years to the company, and committed them to allowing it to claim on their behalf for the following tax year. Tax Credits says it has no intention of misleading customers.

Vanessa Chalmers* says she is owed £4,700 after HMRC sent a refund of overpaid tax to Tax Credits earlier this month. She says she had completed what she thought was an inquiry form, linked to HMRC via a Facebook ad, to see if she was eligible for a working from home tax credit.

Months later, she was notified by HMRC that a £4,700 overpayment for the last tax year had been identified.

“I’m PAYE so it didn’t make sense, then I noticed in the letter a digit was missing from my salary, which must have triggered the calculation, so I alerted HMRC to the error,” she says.

A month on, HMRC informed her that she had to repay the £4,700. To her horror, she discovered that the erroneous rebate had been paid to Tax Credits Ltd.

Unbeknownst to her, she says, the company had signed her up to a “deed of assignment” which transferred to it