Tax rebate firm Brooksdale set to enter liquidation, raising questions for those with HMRC refunds pending

Controversial tax rebate agent Brooksdale is preparing to enter liquidation, leaving questions for the customers whose tax refunds are currently in its hands.

The firm will hold a virtual meeting of creditors today, 12 April, to discuss and vote on a potential creditors voluntary liquidation, This is Money has learned. 

These agreements happen when a company cannot pay its debts, and enough of the firm’s shareholders agree that a creditors voluntary liquidation should happen.

It represents the start of the process of winding down the firm, which will concern those who are waiting for rebate cheques to be sent to them by Brooksdale. 

Brooksdale’s business involves seeking tax rebates from His Majesty’s Revenue and Customs on behalf of customers, but it charges them a 48% commission 

Brooksdale’s business involves seeking tax rebates from His Majesty’s Revenue and Customs on people’s behalf, and charging the recipients a fee of up to 48 per cent of the amount owed. It works on a no-win, no-fee basis.

It specialises in securing tax refunds for those who received compensation when they were mis-sold payment protection insurance, payday loans and packaged bank accounts, and were then wrongly taxed on the original payout.

It also handles claims for marriage tax allowance, uniform allowance and work from home allowance.

Those owed tax refunds are able to apply to HMRC directly and free of charge by filling out the necessary forms, which are available on the Government website.

Brooksdale has previously stated to customers that once secured, tax rebates are paid within 12 weeks. 

However, some wait much longer and This is Money has previously reported on a customer of Brooksdale waiting for more than a year to be paid the refund that Brooksdale had secured on their behalf.

Brooksdale has proposed that Manchester-based firm Fortis Insolvency handles the liquidation, though it will not be formally appointed unless creditors at the meeting vote to approve the appointment. 

It is unclear whether all customers whose money is currently in Brooksdale’s hands are being counted as creditors of the firm.

This is Money understands that Brooksdale has provided Fortis with a list of creditor names and addresses, which does include some tax rebate customers.

The people on that list were posted letters telling them about today’s meeting. 

However, any Brooksdale creditor is entitled to attend and vote at the virtual meeting, whether or not they have received a letter.

A notice was posted on The Gazette about the Brooksdale meeting, but it is not clear from the what time the meeting will be held at. 

Brooksdale is one of around 200 tax rebate agents in the UK, which are collectively used by around 500,000 taxpayers every year.

The business model has proved controversial because of the high fees charged for a service that customers could perform for free themselves.

There has also been questions over how the firms get customers’ details, and whether customers are fully aware of what they are signing up to.

Some customers report getting a letter from a tax rebate firm saying they are seeking a refund from HMRC on their behalf, without realising they had given them the authority to do so.

This is Money contacted Fortis Insolvency, and a representative said the firm had not been appointed as liquidators, and would only comment if they were appointed.

Brooksdale could not be reached for comment.

This post first appeared on Dailymail.co.uk