Controversial tax refund agent Brooksdale is preparing to go into liquidation, leaving questions for customers whose tax refunds are currently in their hands.
The company will hold a virtual meeting of creditors today, April 12, to discuss and vote on a possible voluntary liquidation of creditors, This is Money has learned.
These agreements occur when a company cannot pay its debts and a sufficient number of the company’s shareholders agree that a voluntary liquidation of creditors should take place.
It represents the start of the company’s liquidation process, which will affect those who are waiting for Brooksdale to send them refund checks.
Brooksdale’s business involves seeking tax refunds from His Majesty’s Revenue and Customs on behalf of clients, but he charges them a 48% commission.
Brooksdale’s business involves claiming 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 works without any benefits or commissions.
He specializes 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 deals with 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, which are available on the Government website.
Brooksdale has previously stated to clients that once obtained, tax refunds are paid within 12 weeks.
However, some wait much longer and This is Money previously reported on a Brooksdale customer who waited more than a year to receive the refund Brooksdale had obtained on their behalf.
Brooksdale has proposed that Manchester-based firm Fortis Insolvency handle the liquidation, although it will not be formally appointed unless creditors at the meeting vote to approve the appointment.
It is unclear whether all customers whose money is currently in Brooksdale’s hands are counted as the company’s creditors.
This is Money understands that Brooksdale has provided Fortis with a list of names and addresses of creditors, which includes some clients with tax refunds.
People on that list were sent letters informing them of today’s meeting.
However, any Brooksdale creditor has the right to attend and vote at the virtual meeting, whether or not they received a letter.
TO A notice was published in The Gazette about Brooksdale. meeting, but it is not clear what time the meeting will take place.
Brooksdale is one of around 200 tax refund agents in the UK, which are collectively used by around 500,000 taxpayers each year.
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 companies obtain customer details and whether customers are fully aware of what they are signing up for.
Some customers report receiving a letter from a tax refund company saying that they are requesting a refund from HMRC on their behalf, without realizing that they had been given the authority to do so.
This is Money contacted Fortis Insolvency and a representative said the company had not been appointed as liquidators and would only comment if they were appointed.
Brooksdale could not be reached for comment.