Tax credit agent Brooksdale in liquidation as customers wait ten months for refunds from HMRC

Controversial tax credit agent Brooksdale has gone bankrupt, leaving the company’s clients wondering whether they will receive any money claimed on their behalf.

The Manchester-based company held a virtual meeting of creditors last week, where a creditors’ voluntary liquidation was approved and insolvency firm Fortis Insolvency was appointed to manage it.

A creditors’ voluntary liquidation occurs when a company cannot pay its debts, and enough of the company’s shareholders agree that it should happen. It represents the beginning of the process of winding down the company.

Another Manchester-based tax relief company, Phillipson Hardwick Advisory, held a meeting on the same date and has now also gone into liquidation with Fortis as adviser, the Gazette said.

Brooksdale’s activities include seeking tax relief from His Majesty’s Revenue and Customs on behalf of people, and charging recipients a fee of up to 48 percent of the amount owed. It worked on a no-win, no-fee basis.

Concerned Brooksdale customers have contacted This is Money to tell us they’ve been waiting a long time for their money – and now fear it may never arrive.

Brooksdale has previously stated to customers that tax credits, once obtained, will be paid within 12 weeks.

However, some say they waited much longer. Most customers who contacted us said they had been informed by HMRC that their refund had been paid to Brooksdale between July and October 2023. However, the amount was never communicated to them.

One of them told us that Brooksdale had received two checks on her behalf in July and October 2023, totaling almost £2,000, but neither had been forwarded to her.

Another said: ‘HMRC contacted me to say that a tax refund due to me was sent to Brooksdale on August 16, 2023 and collected. I have written and emailed this company to transfer the money owed to me but to no avail.”

This is money that was previously reported about a Brooksdale customer who waited more than a year for the refund Brooksdale secured on their behalf.

Although Brooksdale has an overall rating of 4.4 stars based on 8,100 reviews on the website Trustpilot, every review posted in the past month has earned one star.

It specialized in securing tax refunds for those who received compensation when they were mis-sold payment protection insurance, payday loans and packaged bank accounts, and then wrongly taxed on the original payout.

It also processed applications for marriage tax exemption, uniform allowance and work-from-home allowance.

Those owed tax refunds can claim directly and free of charge from HMRC by completing the necessary forms. You can find a guide on how to do this on the HMRC website.

The business model has proven controversial due to the high fees charged for a service that customers can perform themselves for free.

Questions have also been raised about how tax credit companies obtain customer data and whether customers are fully aware of what they are signing up for.

Some customers report receiving a letter from HMRC stating that an agent had received a discount on their behalf, without realizing they had given them the authority to do so.

This often happens when customers fill out a form online thinking they are simply declaring an interest, when in fact they are creating a deed of assignment that allows a tax agent to apply for a rebate on their behalf.

HMRC cannot reverse this unless it receives a signed letter from both the tax agent and the customer.

This is Money contacted Fortis Insolvency to ask what would happen to customers’ money.

It said it could not provide answers at the time but would try to do so soon.

Brooksdale did not respond to a request for comment.