Rebus Group raised £816,790 via crowdfunding platform Crowdcube last year to fund an expansion of its business model, whereby the firm targets investors who had been mis-sold financial products, primarily arrangements which were subsequently deemed to be tax avoidance schemes, including a number of film tax relief schemes.

According to the funding pitch, Rebus, which made pre-tax losses of £1.4m in 2013-14, was valued at £12m. The company said it expected that pre-tax profits would rise to £12m by 2017-18 and stated that investors ‘could anticipate making a multiple of between 6.4 and 10.6 times their cash invested’ by 2018.

According to the funding pitch, Rebus, which made pre-tax losses of £1.4m in 2013-14, reported revenues in 2015 of over £1.2m. The company said it expected that pre-tax profits would rise to £12m by 2017-18 and stated that investors ‘could anticipate making a multiple of between 6.4 and 10.6 times their cash invested’ by 2018.

Rebus told prospective Crowdcube investors that the market it operated in is estimated to be worth £55bn. The firm said it was  already in contact with over 11,500 investors and was currently managing claims worth over £30m in fees. It described itself as ‘led by the former CEO of Ask Jeeves and supported by alumni of KPMG and PWC.’

According to the company's website, Rebus was managing 1,700 claims with a value of more than £1bn. It was founded in 2009 and employs 29 full-time members of staff. 

Rebus’s website says:  ‘We work very closely with tax advisers and accountants to help mitigate our clients’ exposure to tax avoidance schemes or any other tax issues that may arise, and we can help you understand exactly what lies ahead on a variety of courses of action, because we have been there many times before.’

A spokesman confirmed that Rebus is in administration but said the company had no comment to make, and that all communication should be directed to the administrators at Resolve. It is believed that the administrators are seeking a buyer for some or all of the business by the end of tomorrow.

As a result of the company’s collapse, more than 100 individuals stand to lose investments of between £5,000 and £135,000. People who paid Rebus upfront fees to investigate mis-selling claims are also set to lose their money.

In a statement Crowdcube said the failure of Rebus ‘highlights the importance of spreading investment risk with a diversified portfolio’.

Michael Avient, partner at UHY Hacker Young,  said that while crowdfunding is a ‘very useful medium’, he had doubts about its suitability as a means of funding a business model such as the one adopted by Rebus.

‘The nature of Rebus’ work meant it is a very cash hungry business. Taking cases involving financial advisers to the Financial Ombudsman or challenging schemes in the courts against HMRC is very expensive. Especially in relation to any tax litigation, the costs can run on for a number of years. It may be that Rebus was looking for a big win and simply ran out of money,’ Avient said.

Avient cautioned that there will be a number of Rebus clients who are participants in group actions who will now be without representation. He warned that some individuals may be at risk of missing key deadlines for providing information or other responses, which may result in difficulties.

‘Some clients are vulnerable. They have been party to a tax scheme which has either failed or is under investigation by HMRC, and now with the new accelerated payments regime, they could be facing demands for very significant amounts of money,’ Avient said.

‘One area of major concern is that the clock doesn’t stop on the process, but they don’t have an adviser.  If they had taken a claim via a law or accountancy firm, then they would have protection of a professional body in the event of a collapse, in terms of providing someone to take on their case and look after their interests,’ he added.

Avient also pointed out that the taxpayer also stands to lose from the Rebus collapse, as investments via Crowdcube qualified for the Enterprise Investment Scheme (EIS). Higher rate taxpayers who took advantage of this received 30% tax relief on any initial investment and will also be able to offset the loss at higher rate.