WHEN a letter from the taxman came late last year telling Stan Kirk he was due a refund, he was excited.
He was due just over £42, but he quickly noticed that the money was being sent to a firm called Pockex Tax and not to his bank account.
The 72-year-old pensioner, who used to be a delivery driver and salesman and lives in Nottingham, discovered Pockex Tax was a third-party company that offers to apply for tax rebates on your behalf.
These firms, which are legal, offer help claim back money in exchange for a big chunk of the cash that they have won back for you, plus admin fees on top in some cases.
Stan had no idea how this firm had made a claim on his behalf and he quickly called Pockex Tax to find out what was going on.
He was told that a cheque would be sent in the post for his tax refund and when it arrived in late December last year, Stan was left with just over £27.
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It had taken a 36% cut of his money.
Stan lives off his state pension, which is £672 a month, and said the cash could easily pay for a week's worth of groceries or a tank of petrol.
"It's not a lot of money, but things are getting tight, so every little helps," Stan said.
He told The Sun that he thinks the charge is a "rip off" and is concerned that it may happen again.
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Five years ago he had used a different claims management firm called Gladstone Brookes to help settle an old PPI claim.
Pockex Tax told The Sun that Stan gave permission for his data to be shared and claims to be managed by them, as part of a partnership with Gladstone Brookes, in 2021.
As such, it was acting legally.
A spokesperson for Pockex Tax said that the company has complied with all legal obligations and that Mr Kirk was "engaged knowingly" throughout.
Unlike other types of claims management firms – such as ones which offer to help with PPI or loan claims – they are unregulated by the city watchdog, the Financial Conduct Authority.
This means there is no legal cap on the amount they can charge customers and you can't take up your issue with an ombudsman if things go wrong.
Complaints about tax claims firms
More generally, over 2,200 people complained about tax claim managementfirms between January and October last year, according to latest HMRC figures.
The majority of complaints were from people who were not properly informed about terms and conditions when using claims firms or who had not been made fully aware that they were dealing with a third party, and not HMRC.
Moneycomms personal finance expert Andrew Hagger said: "If you think you are owed a tax rebate it is best to contact HMRC directly yourself.
"There’s no fee involved and if you are due a rebate you’ll keep 100% of it as opposed to dealing through a third party tax rebate company who in some cases will rip you off by taking 40% or more of anything owed to you."
Check HMRC's website – you'll be able to see which tax rebates you can apply for yourself without spending a penny.
If you do decide to use a claims management firm, then watch out for red flags.
For example, check out the fees – if they are high, you should be wary about using the service.
Any fees you should have to pay using a claims service should be clearly stated on their website.
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Look out if a firm asks you for a fee in order for them to transfer the money into you bank account – you shouldn't be charged for this.
You should also check the terms and conditions carefully to make sure the firm can't claim on your behalf for other refunds, as you could end up missing out on cash.
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