Dalton & Dalton Tax Consultants Ltd, a Lancashire based company which misrepresented its ability to obtain council tax rebates for customers, has been wound up in the High Court - on 4 April - following an investigation by the Insolvency Service.

The Court heard that the company made unsolicited calls to arrange appointments for its sales agents to visit prospective customers at home, where agents invariably told prospective customers that they were likely to be successful with an application for council tax re-banding and hence a rebate of council tax paid in previous years.

An agreement was signed and the customer was required to pay an upfront fee of 165 if they wished to instruct Dalton & Dalton Tax Consultants Ltd. In the event that the company achieved a council tax rebate for a customer, it was able to retain a success fee of 25% of the rebated amount.

Commenting on the case, Colin Cronin, an Investigation Supervisor with the Insolvency Service, said,

Dalton & Dalton Tax Consultants Ltd grossly overstated its ability to achieve council tax re-banding and rebates for its customers, thereby inducing customers to pay an advance fee of 165 for this service.

It is telling that the companys income was derived almost entirely from these advance fees and very little was from the success fees to which it was entitled if it achieved financial rebates for customers.

These winding-up proceedings show that the Insolvency Service will take firm action against companies which mislead the public in this way.

The investigation established that the company had no meaningful expertise or success in challenging council tax banding on behalf of its customers.

Analysis of the companys income showed that it had banked receipts totalling 1,085,946 of which 1,045,821 represented the upfront fees paid by customers and just 17,688 of the companys income was from success fees. Only 1% of the 2,750 concluded council tax banding challenges made by the company had been successful.

The Court found that Dalton & Dalton Tax Consultants Ltd had traded with a lack of commercial probity by making misleading and unfounded statements and selling a service which provided no commercial benefit to the overwhelming majority of its customers.