Claim Companies Take a Cut: Why Going Direct to HMRC Is Free
Search for a uniform tax rebate and the first several results will be companies offering to get it for you. They are not scams in the criminal sense. Most of them file real claims and most of their customers do end up with some money. The problem is arithmetic. A uniform flat rate claim is worth between £12 and £56 a year depending on your occupation and tax rate, HMRC's own service is free, and every pound a company keeps is a pound out of an already small amount. HMRC's position is blunt: taxpayers "can claim directly from HMRC via the free and secure service on GOV.UK and will receive 100% of the money owed".
The Numbers, Set Out Plainly
Take the three most common situations on this site.
| Occupation | Flat rate | Cash at basic rate, one year | Five years |
|---|---|---|---|
| Nurse, midwife or healthcare assistant | £125 | £25 | £125 |
| Police officer to chief inspector | £140 | £28 | £140 |
| Occupation with no listed rate | £60 | £12 | £60 |
Those five-year figures are the whole prize for a first-time claimant on the basic rate. Commission is normally charged as a percentage of whatever is repaid, often with a minimum fee that bites hardest on the smallest claims. Work out what a percentage of £60 leaves you with, then subtract a minimum fee, and the case for doing it yourself makes itself.
Assignments Used to Be the Real Danger
Until a few years ago, refund companies typically asked customers to sign a deed of assignment. That did something far more significant than authorising a claim: it legally transferred the right to the repayment to the company, so HMRC paid them rather than you, and they passed on whatever was left after their fee.
Worse, an assignment could be drafted to cover an entire tax year rather than the single claim in front of you. People who thought they were applying for one small refund found that any other repayment due to them for that year had also been signed away. The Tax Credits Ltd case, which HMRC and consumer bodies wrote about extensively, is the best-known example.
The law changed. Assignments of income tax repayments where HMRC received notice on or after 15 March 2023 are legally void, and the repayment remains the taxpayer's property. Agents now have to use a nomination instead, which does not transfer ownership and which you can cancel.
Nomination versus assignment: a nomination is an instruction telling HMRC where to send your money, and you can withdraw it. An assignment transferred ownership of the repayment itself. Assignments no longer work, but you should still read carefully what you are signing and check whether the payment is routed to you or to a third party.
What Else HMRC Changed
Alongside voiding assignments, HMRC introduced a registration process for repayment agents and tightened the standards they have to meet. Those standards include a 14 day cooling off period and a requirement that an agent's communications are fair, clear and accurate and do not mislead or conceal material facts. If a company you are dealing with is not offering a cooling off period, that tells you something.
HMRC also tightened the claims process itself. From 14 October 2024, most PAYE employment expense claims have to be supported by evidence, a change HMRC made in response to what it described as a growing tax risk from ineligible claims, some of it driven by firms submitting non-compliant claims in bulk. Flat rate expenses for uniforms, clothing and tools are exempt from that evidence requirement, but the wider tightening is a direct consequence of how the agent market behaved.
The Liability Stays With You
This is the point that gets least attention and matters most. If a company files a claim in your name and HMRC later decides it was not valid, HMRC comes to you for the money, not to the company. You signed the authorisation. It is your tax record.
That happens more often than you would think. A claim for an occupation you do not actually work in, a claim for years you were not employed, or a claim for expenses your employer already reimbursed can all be reversed years later, usually by adjusting your tax code so that you pay the money back a bit at a time. Meanwhile the fee you paid the company is gone.
Doing It Yourself Takes About Ten Minutes
You need three things before you start: your National Insurance number, your employer's name, and their PAYE reference from your payslip or P60. For backdated years, the same details for each employer you had.
- Sign in to your Personal Tax Account on GOV.UK using your Government Gateway details, or create an account if you do not have one.
- Open the service for claiming tax relief on employment expenses.
- Choose uniforms, work clothing and tools, and tick each tax year you are claiming for.
- Pick your occupation from the list. If yours is not there, the standard £60 rate applies.
- Submit. No receipts are needed for a flat rate claim.
If the Government Gateway identity checks defeat you, form P87 does exactly the same job by post, and is also free. If you already complete a Self Assessment return, put the claim on the return instead. You must use Self Assessment rather than a P87 if your total expenses claim for the year exceeds £2,500.
When Paying Someone Is Reasonable
There are situations where professional help earns its fee. A complicated multi-year claim involving actual costs rather than flat rates, capital allowances on expensive tools, several employers and a mix of reimbursed and unreimbursed expenses is genuine work, and an accountant charging a fixed fee for it is providing a service. So is anyone helping a person who cannot manage the online process.
What is hard to justify is a percentage of a £60 flat rate claim that took someone ten minutes to type into the same form you could have used. If you do use an agent, look for a fixed fee rather than a percentage, check the payment comes to you, and keep a copy of everything submitted in your name.
How to Spot the Ones to Avoid
- Adverts promising an average refund far larger than the flat rate for your job could possibly produce.
- Any suggestion that HMRC charges for a claim, or that the process is difficult. It is neither.
- Pressure to sign immediately, or no cooling off period.
- Authorisation wording that covers a whole tax year, or all of your tax affairs, rather than the specific claim.
- A fee expressed only as a percentage, with the minimum charge buried in the terms.
- Unsolicited contact by text, email or social media referencing a refund you never applied for.
The relief itself is worth having. It is small, it is straightforward, and it is genuinely yours. It is just not worth sharing with anyone.