Rebate reprobates: Tax refund companies claiming up to half of customers’ money, Which? finds

People are losing out on hundreds of pounds after being enticed into using third-party companies to claim tax rebates instead of going directly to HMRC, a Which? investigation has found.

In a survey of over 4,000 people, the consumer champion found one in five (22%) said they had been contacted by a tax refund company, heard of one by word of mouth or come across a tax refund company online. 

Which? counted a total of 208 firms with ‘tax reclaim’, ‘tax refund’, ‘tax claim’ and ‘tax rebate’ in their names on Companies House, and found ‘tax rebate’ gets 40,500 Google searches a month, despite tax rebates being free to claim via HMRC. 

We found some third-party firms using similar branding and language that you would usually expect from HMRC. Which? has seen a letter sent by the firm Rebate Gateway to a taxpayer and their partner. The letter uses HMRC’s recognisable teal colour, as well as similar fonts and phrases, which could lead the recipients to conclude they were contacted by the government department itself. 

Which? looked at 14 companies that either showed up in the results or were flagged by a consumer who had a negative experience. It found that four out of the 14 companies had no mention of the fees they charge on their main website page or in their FAQs section, but the term ‘no win, no fee’ was used in some cases.

Tax refund companies typically take cuts of 25 per cent to 48 per cent. Which? found that when additional service costs are added, customers are sometimes left with less money than the firm which processed their rebate. 

Which? found that services offering help with claiming Marriage Allowance are particularly common. This tax break lets one partner transfer 10 per cent of their tax-free personal allowance to their spouse, providing their spouse earns less than the current personal allowance. It can reduce the couple’s tax bill by up to £252 a year, while a backdated claim can be made for up to £1,220. 

According to the Consumer Rights Act 2015, customers must be charged a ‘reasonable amount’ for a service. However, for a fully backdated Marriage Allowance claim worth £1,220, some tax refund companies charge nearly half in commission. For example, Tax Credits Ltd takes £585.60 on a service fee of 48%. Which? experts believe it is questionable whether this constitutes a reasonable amount.

Which? found that customers are usually asked to sign legally binding contracts called a ‘deed of assignment’ giving the tax refund company permission to make a rebate claim on their behalf. Alarmingly, depending on the terms, this could stay in place beyond the initial claim, allowing the company to take a share of tax rebates the customer is owed into the future, regardless of whether the collector does further work for them.

There is little recourse for customers unhappy with a tax refund firm. These companies are not regulated so aren’t subject to the same rules as claims-management companies (CMCs). They do not need to be registered with the Financial Conduct Authority and consumers can not take complaints to the Financial Ombudsman Service (FOS).  

Which? is advising consumers to always try claiming a tax rebate by going directly to HMRC in the first instance as the process for making a claim online is relatively straightforward and the applicant will get 100% of their money. Always be wary of third-party firms that may appear prominently in online search results, no matter how legitimate they may seem. 

Jenny Ross, Which? Money Editor, said: 

“Our research shows that huge numbers of people are coming into contact with firms seeking to entice them into handing over potentially hundreds of pounds of their tax rebate in unnecessary and hard to justify fees.

“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.” 



Notes to editors

Which? surveyed 4,000 adults in the UK between 29th October and 2nd November 2021. Fieldwork was carried out online by Opinium and data has been weighted to be representative of the UK population (aged 18+).


Right of replies 

Tax Credits Ltd 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.”

Rebate Gateway said: “While we are unable to agree with any of the points raised, we do endeavour to ensure our clients, and any prospective clients of Rebate Gateway, are fully aware of who we are, and comprehend the services we offer. We will actively review all marketing communications that are forwarded to prospective clients.”

HMRC said: ‘We don’t accredit or in any way approve agents and take firm action against any not complying with the law. We encourage customers to come to us to make their marriage allowance claim. It takes only a few minutes to complete the online application and eligible claims receive 100% of their entitlement. It is important that people thinking of using a tax agent are clear in advance about fees and are satisfied they’ll get the service they sign up for.’


Tax refund tips for customers

  • You might be eligible for a tax rebate if you’ve paid too much tax, perhaps from your current or previous job, on interest from savings or PPI, on foreign income or from pension payments. 
  • You can claim directly from HMRC at There’s no charge, and you’ll receive 100% of the rebate. In some instances, HMRC will grant tax rebates automatically. 
  • If you think a contract term is unfair, you should complain to the trader. If the trader doesn’t agree, we recommend you seek legal advice before breaking the terms of the contract. For more information about the Consumer Rights Act 2015: 
  • If you were led to believe that the third party company was an official government website, you can make a complaint to the Citizens Advice Consumer Service on 0808 223 1133.
  • Infographic on Marriage Allowance:


About Which? 

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation, we’re not for profit and all for making consumers more powerful.


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