In January, authorities issued a stark warning about online firms offering to reclaim overpaid tax for customers, often at an exorbitant fee. These companies frequently ensnare clients in perpetual contracts, leaving them with limited options to extricate themselves. One such company, Calculate My PPI, has come under scrutiny for its practices. The firm advertises its services to help customers reclaim PPI tax rebates, asserting that those who made successful PPI claims in the past four years might be eligible for rebates worth thousands from HMRC. However, customers have reported unexpected issues when dealing with these services.
A troubling case involves a customer who discovered her rebate check was being sent to Calculate My PPI, a claims company she had engaged several years ago. According to HMRC, she was entitled to a rebate of £324 for the tax year 2020/2021. This incident highlights the company's practice of deducting a substantial 35% of any payout plus VAT as payment for its services. Customers are required to sign a deed of assignment to HMRC, granting the company the authority to act on their behalf on an ongoing basis.
The company's website prominently features a news cutting with Martin Lewis's image, urging individuals to claim their PPI tax rebate before the deadline. However, Martin Lewis has publicly distanced himself from these practices.
“I personally wouldn’t touch CMPPI with a bargepole – especially as it is using my name on its website without notifying me – and it knows I suggest people DIY these tax claims for free.” – Martin Lewis
The deadline for PPI compensation claims passed in August 2019, a year before Calculate My PPI was established by a 34-year-old self-proclaimed teacher based in Slough. This raises questions about the legitimacy and timing of the company's operations. Furthermore, some customers who initiated PPI claims through third parties have found their signature and national insurance number transferred onto a deed, allowing Calculate My PPI to capitalize on any pending tax refunds.
HMRC has clarified its position on these matters, advising affected individuals to address their concerns directly with the companies involved.
“We take firm action against any agents who are not complying with the law. We encourage customers to come to HMRC directly to make their claims.” – HMRC
The simplicity of claiming rebates directly through HMRC further calls into question the necessity of using third-party services. Completing HMRC's online application for a tax rebate takes only a few minutes, providing a straightforward alternative to potentially costly third-party claims firms.
Despite this, many customers remain unaware of the ease and cost-effectiveness of handling claims independently. Those trapped in ongoing contracts with third-party claims firms may struggle to remove their agent from HMRC records without obtaining a contract waiver. This predicament underscores the importance of understanding the implications of assigning an external agent to manage one's financial affairs.
Calculate My PPI's practices have drawn criticism due to their potential financial impact on unsuspecting customers. The company's methods prompt concern over transparency and ethical standards within the industry. As individuals navigate their financial decisions, the cautionary tale of dealing with such firms serves as a reminder of the potential pitfalls associated with third-party claims services.