The Tax Refund Company FAQ’s
our tax code tells your employer how much tax to take off your wages. If your employer uses the wrong code, they’ll take the wrong amount of tax…….and you’ve guessed it, it’s nearly always too much! HMRC sends out a new tax code at least once each year, but sometimes several times a year. Your employer has to use the tax code they’re sent, and they’ve no idea if it’s right or not. Ultimately it’s your job to check your employer’s got the right code and taken the right amount of tax. It’s a common mistake to believe that because “I’m on PAYE”, your employer sorts your tax and takes the right amount. Over 1 in 3 of the tax code reviews we complete end up with our customers getting a tax refund, so it’s clear every taxpayer should check their tax code
Ideally you should check it every year. You get a new tax code every year so you should always check it’s correct. You also need to do this in case your employer isn’t taking enough tax, otherwise you’ll end up owing HMRC money and that could cause you financial difficulties in the future.
There are a couple of reasons. The first is HMRC could have made a mistake with your tax code in the last 4 years.
The other is you might not know there are tax allowances, (or were tax allowances as some of them have gone now) you were entitled to ask for so you paid less tax. If you didn’t know about these allowances, there’s no way you could ask HMRC to put them in your tax code, so they give you the wrong code. That meant you paid more tax than you needed to.
The good news is it’s not too late to get your money back because HMRC lets us go back up to 4 years to claim any allowances you missed out on, or to correct any mistakes.
The problem you’ve got is unless you know what to look for, you won’t spot any mistakes and unless you know what allowances you were entitled to, you can’t ask HMRC to let you have them! That means any money you overpaid is going to stay in HMRC’s bank account, instead of yours! HMRC also gives you a deadline to claim your money back. If you miss it, they’ll keep your money!
We’re asked this nearly every day! Your employer has to use the tax code they’re given by HMRC. If the code’s wrong, your employer can’t do anything about it. It’s up to you to check the code and make sure HMRC has given them the right one. If it’s wrong, it’s your responsibility to get it corrected as soon as possible.
Unless we can get you a refund, you won’t pay us anything.
Where we do help you get a refund, our fees are easy to understand. If your refund is up to £100, our fee is £38. If it’s over £100, the fee is 38p for each £1 refunded. In the event your refund is less than £38, you’ll have nothing more to pay us.
Any refund you receive for a current tax year that’s paid directly into your wages is free of charge – there will be nothing to pay us on this part of the refund.
We’ll also arrange a new tax code for you where needed. Any savings this makes for you next year and each year thereafter will be yours to keep. You won’t pay us a fee for these either.
If you’re thinking this, it’s worth looking at what options you’ve got, apart from using us.
The first option is you contact HMRC yourself. Take a look at Question 16 to see what this involves.
The second option is to use a high street accountant. They’ll charge you £100 – £150 per hour and you’ll have to pay this even if you don’t get a refund. If your case gets complicated, or HMRC asks them lots of questions, or loses your file and asks your accountant to resend it (which they’ve been known to do over and over again), you’ll end up paying your accountant loads of money! There’s no way of knowing how much it’s going to cost you until you’ve reached the end of the process, and by then it’s too late! It could easily turn out to be very expensive, and there’s no guarantee you’ll get a refund!
The third option is you do nothing. During 2013-2015, 37% of the reviews we finished ended up with a refund, so if you look at that another way, by doing nothing there’s a 37% chance you’ll lose all the money HMRC owes you. That’s the same as paying 100% of your refund to HMRC. Now that’s really expensive!
The fourth option is to use another company. If you want to do this, here’s a couple of useful tips…
Tip 1 – Check for hidden charges. You may have to read the “small print” very carefully to find these charges.
Tip 2 – Check they’re not cherry picking or specifically looking for the big refund cases. If they quote average refunds of over £400, they are. Unless you’re likely to be due a large refund, these firms often find a way not to deal with your case, simply because it’s not worth their while for a lower percentage. They probably won’t say, “you’re not due anything”, but they’ll try and give you that impression. If you’re due a refund and they don’t get it back for you, you’ll probably lose the whole lot. That’s exactly the same as paying a fee of 100%!
Tip 3 – Check they’re not getting you to send your own claim direct to HMRC but making it look as if they’re doing it for you! (They’ll be telling you to send your paperwork to an address with the post code BX9 1AS which is HMRC.) Of course they won’t tell you they’re doing this because they want you to think they’re actually doing some work for you to justify their fee. It’s a very easy trick to miss if you don’t know what to look for, especially as it will be very well disguised. It has all the same risks we talk about in Question 16, with the added risk you’ll pay a fee as well. Apart from the fact you’ll pay them over 20% of your refund, plus a cheque handling fee for doing nothing but letting you download a pack of forms to fill out with some instructions on how to do it, you could end up facing serious problems with HMRC, which you will have to sort out on your own, or pay an accountant to sort out!
Tip 4 – If their website says that they’re members of an “Association”, or “Scheme” designed to protect you or your refund, do some proper background checks into the Association or Scheme. It’s probably not what it appears to be! Also, check the members of that Association or Scheme to see if they’re actually linked to each other, owned by the same people, or even exist! There’s at least one such organisation that several companies are still advertising on their websites, despite the fact it was closed down over 3 years ago!
Tip 5 – Check their “small print” doesn’t say that if HMRC says you have underpaid tax as a result of them making a claim, the company does not accept liability or that it is up to you to sort it yourself. It may not be worded as simply as this, but if you spot wording along these lines, it’s a good indication they’re just making claims for allowances they think you’ve missed out on. If they’re not doing a FULL review of your tax codes for the last 4 years, they could easily send in a claim when you actually owe more tax and they wouldn’t know, which is why their small print is designed to protect them and make it your problem to sort out if they get you into a mess. It could be a very costly problem!
There’s a number of very good reasons why we’re the “Approved Provider” for Trade Unions such as the NUT, ATL, UTU, RMT, & USDAW, professional bodies such as The Society of Chiropodists & Podiatrists, Association of Optometrists, Royal College of Nursing, as well as Local Authorities, Police Federations and major employers. Ultimately, like most things in this life, you’ll get what you pay for.
To do a proper in-depth review, it’s probably going to take 6 – 10 weeks if you reply quickly to the letters or emails we send you. We’ll tell you if we put in a refund claim to HMRC. They normally take 6 – 8 weeks to deal with simple claims, but up to 30 weeks or more for complex claims. If you’ve read anywhere else that you can get your refund quicker than this, we suggest you take it with a pinch of salt! We send in thousands of refund claims every month so we know how long it really takes. It’s better we tell you the truth, rather than try to make out you’re going to get your money quickly. Remember, we only get paid when you get your refund, so we’ll do everything to try and get your money back as soon as possible.
Once we’ve finished your review, we’ll write and tell you we’ve finished and return any original documents you sent us.
You’ll get a letter directly from HMRC telling you how much you’re getting. They’ll also tell you they’re sending the refund to “your agent”. It will show your agent as PTS or Personal Taxation Services which is us.
If they follow your instructions, HMRC will send us a cheque. We’ll take our fee and send the balance to you. You should get your cheque within 28 days of the date shown on the letter you’ve got from HMRC.
28 days is just a guide because local or national postal strikes or changes in the way HMRC send out assessments and refunds might slow things up. It also takes up to 28 days because we often don’t get the cheque for 7-10 days after they send you a letter, even though your letter may say they’ve sent it.
Once we’ve got your refund, we’ll check it’s correct and hold on to it for a minimum 7 days to make sure HMRC doesn’t ask for some of it back! We do get cheques for more than the amount due and HMRC will always want it back, so the last thing we want to do is to send you a refund and then have HMRC ask you for some of it back!