HMRC is to refund 60,000 people who had tax rebates processed by a third-party firm.
The money will be given to customers who used Tax Credits Ltd to claim tax back online - with HMRC raising concerns about its practices.
Tax Credits Ltd takes 48% of any rebate owed - despite there being no charge for taxpayers to claim a rebate themselves directly through HMRC.
There are wider concerns about third-party repayment firms on the whole, with the UK tax office launching a consultation into these companies back in June.
In some cases, the websites are designed with the same colours and logos as HMRC to make it look like it is affiliated with the Government.
Have you had trouble claiming money back from a third-party tax rebate firm? Let us know: mirror.money.saving@mirror.co.uk
They often appear via adverts on social media websites, which customers then assume is a free way to reclaim tax.
For a rebate firm to make a claim on your behalf, you must sign an iron-clad contract known as a “deed of assignment”.
But an investigation by HMRC found taxpayers looking to put in a claim through Tax Credits Ltd online had not been shown or specifically asked to sign legal documentation.
In an update last week, HMRC confirmed it will issue two different types of refunds to customers of Tax Credits Ltd as a result.
If you made an online claim with Tax Credits Ltd from May 2022, you will get a refund directly from HMRC.
This is because HMRC paused payments for all claims submitted by Tax Credits Ltd in May - so any successful claims after this date won't have been paid to Tax Credits Ltd.
If you put in an online claim through Tax Credits Ltd between December 2021 and May 2022, your rebate will have been paid to Tax Credits Ltd.
In this case, you should also receive a refund directly from HMRC. All refunds should be paid by mid-November.
You won't be eligible for a refund if you made a claim through Tax Credits Ltd using a paper form.
We’ve asked HMRC what the refund process means for tax claims put through online before December 2021 and we’ll update this article when we know more.
How much you could be due back depends on the size of your tax rebate that was claimed by Tax Credits Ltd.
Taxpayers can make a claim for a tax rebate directly through HMRC’s free online service on Gov.uk for free.
You won’t be charged a fee or have to give up a percentage of your reclaimed tax.
The Mirror has previously spoken to several people who have used tax rebate companies without realising they're not linked to HMRC - or free to use.
Mum-of-two Julie Pulford, who lives in Twickenham, unwittingly used a third-party company after being advised by her employer that she might be entitled to a tax rebate due to working from home.
You can claim tax relief on £6 per week, with the amount you get back based on the rate at which you pay tax.
For example, if you pay the 20% basic rate of tax you would get £1.20 per week in tax relief - this adds up to around £60 per year.
This is what Julie was expecting to get back.
“The online logo and brand was the same brand colours as HMRC and very convincing. It was an online form and remember it being really easy to do,” said Julie.
“My employer did say, it was really easy and was an online form so I didn't think anything of it.”
