Several years ago, I was awarded a payment protection insurance (PPI) refund for money I borrowed. I received the money, which was a nice surprise, and moved on with my life.
But in June of 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 it too.
He put me in touch with another claims firm called Brooksdale, who said they could handle the claim for me, so I gave them all the relevant information.
Tax problems: Brooksdale told our reader she would have her money in 12 weeks, but it’s already been 15 months… and she’s chasing HMRC herself (archive image, posed by model)
Brooksdale said the process would take 12 weeks, but it’s now been 15 months since I first filed the claim and the money still hasn’t been paid.
This is compounded by the fact that I have since discovered that Brooksdale will take a large chunk of my refund in exchange for this shoddy service.
I accept there may have been delays at HMRC so I contacted them earlier this year and received a letter dated early June 2023 saying they had already sent a check to Brooksdale.
I am self-employed and my accountant says he can see that I received a refund from HMRC and the amount. Where is my money? Anonymous, by email
Helen Crane from This is Money responds: I am glad you contacted me as it is an opportunity to warn people about tax refund agents and their unscrupulous practices.
As we reported last week, some customers report receiving a letter from a tax refund company saying that they are requesting a refund from HMRC on their behalf, without even realizing that they had been given the authority to do so.
They also charge high fees for their work.
In Brooksdale’s case, it takes a whopping 48 percent of the money it recovers for clients. Unfortunately, this is not uncommon.
CRANE IN THE CASE
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There are up to 200 of these companies and they are used by around 500,000 taxpayers each year.
And it’s all to get refunds that customers could have gotten themselves, without paying a cent.
That is how. You can find out how much tax was deducted from your original payment, and therefore how much you are owed, by consulting your PPI return or the documentation from the company that handled your original claim.
For most people, it is simply a matter of filling out an R40 form. on the HMRC websiteor print it and publish it.
Explain that you are claiming a refund of the tax paid on a PPI payment and any other relevant details in the ‘other information’ section.
Don’t be surprised by the fact that the form is for refunds of taxes paid on savings and investments. Tax paid on interest accrued on a PPI refund is counted as savings income for HMRC purposes.
However, this means that if you have already earned interest on other savings in the year you received the refund, you may have used up your personal allowance and no refund is due.
So what about your case? Since Brooksdale has already done the work for you, it’s unfortunately too late to avoid the charges, but since you’re paying so handsomely for their services, you’re understandably upset that the process took so long.
Tax refund: Our reader was eligible for a refund from HMRC as she deducted tax from her Payment Protection Insurance (PPI) refund that she didn’t owe.
When he first contacted the claims firm in early June 2022, he was told he would receive the money within 12 weeks.
But his accountant was able to verify when the claim was filed with HMRC and saw that this did not happen until September, 13 weeks later. When you contacted me you had been waiting 15 months and still nothing.
Thanks to information provided by HMRC and his accountant, he knows that he is owed a sum of £712, although after Brooksdale’s fees and charges he would only receive around £340.
You told me that you spent hours on the phone and sent numerous emails, to no avail. You are almost 80 years old and you say that this has been stressful.
He has also done some detective work with HMRC, which he finds annoying because that is what he is paying Brooksdale for.
Through this, he discovered that the check was sent to Brooksdale sometime before June 2023.
But when he last spoke to Brooksdale in August, he simply said he didn’t have the check, would speak to HMRC again and it would take six weeks to get a response.
He also believes the company’s fees may have increased since he initially contacted him.
Big slice of the pie: Tax refund agents often keep a big chunk of the money they recover for their clients. In the case of Brooksdale, it charges a 48% fee
I contacted the company to ask where it was. He didn’t respond directly to me, apart from a generic message saying he was experiencing delays in his “information collection” due to the August bank holiday.
But a week later, you got in touch to tell us that you had finally received the check.
The company also asked him to inform “that journalist”, that is, me, that the situation had been resolved. Again, I let you do the legwork.
Brooksdale offered him some compensation for the delay, but on the condition that he not discuss the details with me.
I would have preferred a personal response from Brooksdale and the opportunity to ask some questions.
But still, I am glad that the money owed to you is already safe in your pocket. At least 52 percent of it.
CRANE IN THE CASE
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