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Don't use refund firms to claim tax rebates, says Which?

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Using a company to help you claim a tax rebate could end up costing you hundreds of pounds extra according to consumer group Which?

Dozens of firms online offer to help customers claim back tax they're owed by HM Revenue & Customs, for example, for the Marriage Allowance.

But these third-party firms charge fees and take a percentage of the tax claim.

Which? says most people are much better off going straight to HMRC themselves to avoid "unnecessary bills".

Tax rebates are free to claim via HMRC, and the process is "relatively simple", but some firms are charging between a quarter and half of the final tax payment received in return for their services, Which? said.

The consumer rights group has identified 208 firms with "tax reclaim", "tax refund", "tax claim" and "tax rebate" in their names. It found the term "tax rebate" gets more than 40,000 Google searches a month.

Some of these third-party firms use similar branding and language to the HMRC, Which? said.

Jenny Ross, Which? money editor, said their research showed huge numbers of people were coming into contact with firms hoping to persuade them to use their services to claim rebates, costing people "potentially hundreds of pounds".

"For most people with a rebate to claim, HMRC is the best port of call. Go to its website directly to ensure you aren't left footing any unnecessary bills," she said.

One of the most common tax claims is for Marriage Allowance, Which? said, which allows one spouse to transfer 10% of their tax-free personal allowance to their partner if their partner earns less than the current personal allowance, and it can be backdated up to a total of 拢1,220.

While firms are permitted to charge a "reasonable amount" for such services, Which? said it found one firm, Tax Credits Ltd, was charging a service fee of 48%.

Tax Credits said: 'We spend a significant amount on marketing and providing access to this potential tax relief. In many cases it's our advertising, not HMRC's, that makes a person aware of it.

"We then present the claimant with a simple mechanism to access the potential overpayment of tax. Our remuneration is contingent on a repayment being secured, and the amount we retain is reflective of this," it added.

Which? said customers who have been misled by websites into thinking they were dealing with the tax authority directly should make a complaint to the Citizens Advice Consumer Service.