The investigation found that third party companies that claim a tax rebate on behalf of a taxpayer usually take a cut of 25-48% of the claims made and when additional service costs are added, customers are usually left with less money than the company who processed their rebate.

According to the Consumer Rights Act 2015 customers must be charged a ‘reasonable’ amount for a service however, Which found that some companies were charging nearly half on a commission. Which states that it is ‘questionable to whether this constitutes as a reasonable amount’.

The investigation also found that customers were asked to sign contracts called ‘deeds of assignment’, which gives permission for tax refund companies to make a claim on their behalf, with some contracts also allowing the company to take a share a future rebate claims, regardless of whether the collector does further work for them.

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