Need to claim a tax refund for work expenses? Go directly to HMRC and avoid rebate firms that can take half your cash
If you need to claim a tax refund for work-related expenses, make sure you claim directly through Gov.uk and avoid using tax rebate firms that'll pocket some of your cash. His Majesty's Revenue and Customs (HMRC) has revealed that seven in 10 people who claimed work-related expenses for the 2021/2022 tax year did so via an agent, missing out on receiving the full amount they could have got back.
More than 800,000 taxpayers claimed tax refunds for work expenses during the 2021/2022 tax year, according to new figures released by HMRC. But over 70% of claimants, with an average claim of around £125, missed out on getting the full amount they were due because they used a tax rebate firm instead of claiming directly through Gov.uk.
Tax rebate firms help submit tax repayment claims - for a fee of usually up to 50% - 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.
A MoneySavingExpert.com (MSE) investigation published in July 2022 revealed that hundreds of people had complained about being duped by tax rebate firm Tax Credits Ltd, with HMRC later confirming it would refund 60,000 people who had been caught out by the firm. As a result of our investigation, HMRC shutdown the firm and introduced new reforms to the way tax rebate firms can operate.
Watch out for claim firm ads when searching online – just scroll past 'em
Third-party claims firms often pay search engines, such as Google, to appear at the top of the results for common terms such as "tax refund", "uniform tax", "work tax rebate" and more.
When we looked on Monday 22 May 2023, we found dozens of ads for at least eight different firms within minutes of searching. These included:
Here are some examples of what the adverts look like so you know what to avoid:
"Married tax rebate"
You don't need to use a third-party claims firm to get a tax rebate for work-related expenses, or anything else
You can go straight to HMRC and you're guaranteed to get 100% of the refund. 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.
If you're claiming for workplace expenses, such as uniforms, you can also check your eligibility and see a full list of what you can claim for on Gov.uk.
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 website address, if it doesn't end in "gov.uk", it's not a Government body.
For further help claiming tax relief, see our guides on:
- Free uniform tax refunds
- Marriage tax allowance
- Reclaiming overpaid pension tax
- Working from home tax relief
- Reclaiming tax on PPI payouts
If you use a tax rebate firm, ensure you're aware of what you're signing up for
If you do choose to use a tax rebate firm, make sure you've properly researched the company you're signing up with and always check the small print to ensure you understand how much commission is charged and how much of your tax refund you're likely to get back.
Plus, watch out for small print, such as: "I unconditionally assign my repayment of tax (for tax years ending 2019/20, 2020/21, 2021/22 and 2022/23) to…. [tax refund company]. As charity Low Incomes Tax Reform Group (LITRG) has warned, this statement gives firms permission to take payment from previous tax years too.