I’m a personal finance expert – the easy tax mistake that could cost your HUNDREDS of pounds… – The Sun

APPLYING for tax refunds can seem like a chore – but using “rip-off” reclaims companies could see you lose HUNDREDS of pounds.

Claims firms are legit third party companies that offer to apply for tax rebates on your behalf.

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Using tax reclaim firms could see you lose hundreds of pounds

These firms offer help in exchange for a big chunk of the cash that they have won back for you, plus admin fees on top in some cases.

But you can easily get the refund yourself for free by putting in a claim to HMRC yourself.

Using them could leave you out of pocket, AJ Bell head of personal finance Laura Suter said.

“Lots of people who think they are owed a tax rebate would rather get a professional in to handle the reclaim, rather than wading through lots of paperwork and jargon themselves,” she said.

“However, there are lots of rip-off merchants operating in this market, meaning that you could end up getting back very little – or none – of the tax you’re owed, so you need to tread very carefully.”

The government is so concerned about rogue firms targeting consumers that it has launched an investigation into how to better protect households.

Here’s how to avoid using a tax reclaims firm – and keep ALL of your tax rebate.

How to spot “rip-off” tax reclaim firms

There are a number of ways to spot “rip-off” tax reclaims firms.

The big red flags you should look out for are sky-high fees.

Any fees you should have to pay using a claims service should be clearly stated on their website.

“You shouldn’t have to hand over any of your details in order to find before you can find out what they charge,” Laura said.

If the fees are too high, you should be wary about using the service.

“Many agents will say they charge no fee but will instead take half, or more, of the tax you reclaim,” Laura said.

“That’s too high and isn’t proportionate to the amount of work they will do.”

Look out if a firm asks you for a fee in order for them to transfer the money into you bank account – you shouldn’t be charged for this at all, Laura added.

There is a risk that any tax rebate won will be paid directly to the tax reclaims firm you used – and not directly to you.

That means you’re relying on the company to pay …….

Source: https://www.thesun.co.uk/money/19818487/money-expert-avoid-mistake-tax-refunds/

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