60,000 people caught out by tax rebate firm Tax Credits Ltd to be refunded by HMRC - here's how you'll get your money back

If you're affected, you will receive refunds automatically. It comes after Her Majesty's Revenue and Customs (HMRC) found there was "insufficient evidence" that people who had claims processed via Tax Credits Ltd were aware they were entering into legally binding agreements with the firm.

An MSE investigation published in July revealed that hundreds of people had complained about being duped by Tax Credits Ltd. The firm took 48% of any rebate due.

See our MSE News story for our full investigation into Tax Credits Ltd and how to claim a tax rebate yourself. You can also see our Copycat websites guide for help on similar sites to avoid. 

HMRC found that people had not been shown legally binding documents

Tax rebate firms help submit tax repayment claims - for a fee - and will ask you to grant them permission to do so by signing a document or electronic form that gives them authority to reclaim tax for you.

But HMRC's investigation found that people enquiring with Tax Credits Ltd online had not been shown or specifically asked to sign legal documentation that would make it clear claims would be paid to the company. 

We've asked if any enforcement action will be taken against Tax Credits Ltd and we will update this story when we know more. 

Affected customers will be refunded by mid-November - and you don't need to do anything to get it

There are two groups of people who will receive a refund from HMRC:

• Those who made an online claim with Tax Credits Ltd from May 2022. In May, HMRC paused all payments for all claims submitted by Tax Credits Ltd. This means any successful claims from May 2022 won't have been paid to Tax Credits Ltd and will be fully refunded directly to you from HMRC. We're checking the exact date payments were paused and will update this piece when we know more. 

• Those who made an online claim with Tax Credits Ltd between December 2021 and May 2022. These claims will have already been paid by HMRC to Tax Credits Ltd. HMRC will refund you if you fall into this category, but we're checking if this will be a full refund on top of the money you may have already received or a partial refund to make up for the 48% fee taken by Tax Credits Ltd. We're also checking what happens if Tax Credits Ltd has your cash but you haven't yet received it. 

All refunds should be paid by mid-November. You'll only be due a refund if you enquired through Tax Credits Ltd's online process after December 2021 as this is when the firm introduced a new online process for claims, which appears to be at fault. We've asked about the situation for people who made claims before this date and we will update this story when we know more. 

You also won't be eligible for a refund if you made a claim via Tax Credits using a paper form, as HMRC has deemed these claims to be valid. 

How to claim a tax rebate on your own

You can go straight to HMRC. It's free and all you need to do is fill in some details online, whether you're claiming tax relief (at gov.uk/tax-relief-for-employees) or a tax rebate (at gov.uk/claim-tax-refund). If you don't have access to the internet, you can also call HMRC on 0300 200 3300.

Watch out for copycat websites - these need to make clear they aren't affiliated with the Government and will say this somewhere on their site. Also, check the URL, if it doesn't end in "gov.uk", it's not a Government body.  

Plus, watch out for small print, such as: "I unconditionally assign my repayment of tax (for tax years ending 2018/19, 2019/20, 2020/21 and 2021/22) to…. [tax refund company]," warns charity Low Incomes Tax Reform Group (LITRG). This statement gives firms permission to take payment from previous tax years too. 

For further help, see the LITRG's guidance on how you can claim a tax rebate. You can also check our tax code calculator to see if you may be due any tax back.

What does HMRC say?

Angela MacDonald, HMRC’s deputy chief executive, said: “We are taking action here to make sure Tax Credits Ltd’s clients receive the money they are entitled to. We will refund affected taxpayers and write to them about their refund - they won’t have to do anything to get their money."