Tax refund agent Brooksdale in liquidation as customers reveal 10-month waits for HMRC refunds

Controversial tax refund agent Brooksdale has gone into liquidation, leaving the firm’s clients wondering whether they will receive the money claimed on their behalf.

The Manchester-based firm held a virtual meeting of creditors last week, where a voluntary liquidation of creditors was approved and bankruptcy firm Fortis Insolvency was appointed to manage it.

Creditors’ voluntary liquidation occurs when a company cannot pay its debts and a sufficient number of the company’s shareholders agree that this should happen. It represents the beginning of the company liquidation process.

Another Manchester-based tax return firm, Phillipson Hardwick Advisory, held a meeting on the same date and has now also entered liquidation with Fortis as adviser, according to the Gazette.

Brooksdale’s business involved seeking tax refunds from Her Majesty’s Revenue and Customs on behalf of individuals and charging recipients a fee of up to 48 per cent of the amount owed. It worked without any profit or commissions.

Concerned Brooksdale customers have contacted This is Money to tell us they have waited a long time to receive their cash and are now worried it will never arrive.

Brooksdale has previously stated to clients that once obtained, tax refunds are paid within 12 weeks.

However, some say they have waited much longer. Most customers who contacted us said that HMRC had informed them that their refund had been paid to Brooksdale between July and October 2023. However, it was never passed on to them.

One told us that Brooksdale had received two checks in his name in July and October 2023, totaling almost £2,000, but that neither had been sent to him.

Another said: ‘HMRC contacted me to tell me that a tax refund due to me was sent to Brooksdale on 16 August 2023 and collected. I have written and emailed this company to send me the money owed to me but to no avail.’

This is what Money previously reported about a Brooksdale customer who waited more than a year to receive the refund Brooksdale had obtained on his behalf.

While Brooksdale has an overall rating of 4.4 stars from 8,100 reviews on the Trustpilot website, every review posted in the last month has given it one star.

He specialized in obtaining tax refunds for those who were compensated when they were missold payment protection insurance, payday loans and packaged bank accounts, and then wrongly charged taxes on the original payment.

It also processed applications for marriage tax relief, uniform allowance and home working allowance.

Refunds of tax due can be requested from HMRC directly and free of charge by completing the necessary forms. There is a guide on how to do this on the HMRC website.

The business model has proven controversial due to the high fees charged for a service that customers themselves can perform for free.

There have also been questions about how tax refund companies obtain customer details and whether customers are fully aware of what they are signing up for.

Some customers report receiving a letter from HMRC saying that an agent has been paid a refund on their behalf, without realizing that they had been given the authority to do so.

This often happens when clients fill out an online form thinking they are simply expressing an interest, when in reality they are creating a deed of assignment that allows a tax agent to seek a refund on their behalf.

HMRC cannot reverse this unless they receive a signed letter from both the tax agent and the client.

This is Money contacted Fortis Insolvency to ask what would happen to customers’ money.

He said he couldn’t give answers at the moment but would try to do so soon.

Brooksdale did not respond to a request for comment.