Tax Credit Overpayments 03/04

deneka_2 · 5 January 2005 at 6:07PM

I am awfully confused and I've heard that the IR made alot of overpayments, some of which wouldn't have to be paid back as they we're an error on the part of the IR.

Basically I've had a notice to say that :

I was overpaid WTC £397.26. Which is possible, my partner changed his job & hours a couple of times, during the year, so this I don't have a problem with.

What I do have a problem with is :

They said I have been overpaid by £507.06 CTC!! I don't know how this is atall possible. I have two children, had two children at the beginning of year & had two children at the end of year. Nothing changed. I pay no childcare...I can't understand how I've been overpaid. I did nothing wrong.

Can someone please advise me on this? I'm quite worried, as don't want to be paying back money that I don't owe.

Fran · 5 January 2005 at 7:30PM

Hi deneka,

I would suggest as a first step you give them a ring to see if they confirm this over the phone and if they can explain how this has happened. If you would still like some help then, post back here.

Spendless · 5 January 2005 at 7:31PM

i thought ctc was also dependant on income :-/
so if your household income was higher due to overtime then i would have thought this would affect CTC as well as WTC :-/.

Sorry i can't be any help

irs101 · 6 January 2005 at 12:37PM

Spendless is right, any change in income compared to the figure you put on the claim form (probably your 01/02 income) could potentially affect both WTC and CTC.

Is the WTC overpayment the whole of your WTC award for 03/04?

If your husband has only had changes in income, then IR should be able to explain the calculation relatively easily. If however he's had periods working less than 30 hours and some more than, it gets a bit more complicated to explain fully.

Come back with more details - income, hours worked, how they changed through the year - if you want a fuller answer.

But don't worry, you haven't done anything wrong. You aren't obliged to tell IR about changes in income until the end of the year - presumably as you have done. But if you want to avoid an overpayment in future, just keep updating the estimate of annual income that IR hold for you.

irs

deneka_2 · 6 January 2005 at 2:24PM

ok I'm going to give them a call. We had problems throughout. 2003/2004 (tax year)

My partner was self employed from 01/05/03 - 14/07/03. Previous to that we we're on benefits, so the initial claim was based on his income as a self employed person. He then began a new job (not self employed) on the 02/08/2004. so for a period of a few weeks, he was actually out of work.

The initial claim was based on £0.00 income for the previous year, as we we're on benefits and an estimated income of £14,000.00 for 2003/2004. From his P60, the income was approx £14,500.00 without getting all the paper work out, I can't be 100% on figures, but this is about right.

So in effect we we're earning about £500 more throughout the year than, was declared.

We put our new claim in for this year and only recently received the letter regarding the overpayment. I didn't realise that income effected the CTC element, I could understand how a slight overpayment occured on the WTC element, but cannot understand how such a huge overpayment occured for the CTC.

To be honest, when calling the IR regarding tax credits, I find the whole thing very stressful, as you speak to one person, think you've got it all sorted and then call again and get told something completely different. I was told its because there is more than one call centre and so you never really get to speak to the same person more than once. I find that really annoying.

I will try calling them when I've dropped my daughter off at nursery, see what they say.

irs101 · 6 January 2005 at 5:55PM

Hi

I'm not sure I'm going to be able to explain this very well, but I've run the estimated details you've given (and made a few assumptions) through a spreadsheet and I think I can see two reasons why this has happened.

Leaving and entering work is an event that triggers a new "relevant period" in tax credits-speak. So you award has 3 relevant periods in it (the 1st period not starting until May 03). So it is a complex calculation - in affect you have to do 3 calculations of entitlement and then adjust for income - first problem. [This also means that you have no hope in checking this out on any of the online calculators.]

From what you have said, your husband started at the annual equivalent of £14K, a period of no income and then a period of higher income (an assumption, but with good grounds - see below).

Your initial provisional award entitled you to full CTC all year and some WTC. When your husband left work, he would have gone onto full CTC and no WTC. When he reentered work (I assume you told IR this at the time) IR would have gone back to recalculate (reduce) your entitlement during the unemployed period. I think whether IR is right or not all turns on what you estimated would be your husbands income in his new job.

It looks to me like you must have originally told IR significantly less than the outcome. You say that £14.5K appeared on the P60. AFAIK a P60 only covers your income from a particular employer, it wouldn't cover the self-employment income from earlier in the year. So, as I understand it, you earned £14.5K plus the self-employment income. Is that what you told IR when you renewed? It would explain the larger overpayment.

So in one scenario I've looked at (just using estimates) the overpayment was £500 in WTC and £100 in CTC - obviously I've got the details wrong, but you get the idea that what IR told you could well be right.

The crucial thing is to make sure IR have all the correct details in terms of exact dates for leaving and entering work and exactly what you earned in total for the year. I'm not aware of any situation when the IR computer has got the calculation wrong - it is the details put into it that leads to the problems.

I can understand about the frustration with the call centres - there are 7 of them I think, with hundreds of people in each. But they are supposed to log details of your call on the computer. So if you don't think this has been done adequately so that the next person you speak to can't pick up the problem, complain. Keep a note of when you call - all calls are recorded.

If you still can't understand how IR has got to the figure, PM me with the details IR have for you (income, dates of work etc) and I'll try and explain the calculation in detail.

irs

deneka_2 · 7 January 2005 at 2:31AM

Thanks very much for that. Confusing as it was for me to take it all in, I think I get the jist of things.
Unfortunately it was probably our fault, as when my partner left his self employed job and was then unemployed for a few weeks, we did nothing. we didn't claim any Jobseekers allowance or anything, but lived on the tax credits, he knew that he was going to be getting this other job you see. Perhaps that is where we went wrong. In which case I can understand that now.
I did tell them when he started his new job and told them what his weekly salary was at that time & they did make some kind of adjustment as our tax credits decreased, certainly the WTC part did, I am not 100% sure about the CTC though.
The thing that confused me more than anything was the fact that the massive over payment appears to be on the CTC and I didn't realise that this was dependant on your income!
What I shall do, if it is alright with yourself, is sort out my paperwork tommorow and pm you the details for clarification, before I attempt to call the IR to discuss it, because they just confuse the hell out of me, to be honest. Thanks again for your help, much appreciated.

karenj · 7 January 2005 at 4:50AM

Just come upon this post which I find most interesting.

I phoned the tax credit people and told them that my circumstances had changed. i.e I had gone from full time to part time work and my salary had reduced, but no other changes to my partner's salary. No problem they said. Then I received huge amounts of tax credits as they had only based it on my salary, so I phoned them. Eventually they amended the payments, but this year in April my credits were reduced because I had been overpaid!!! Laughable. How many times do you have to tell these people, after spending days trying to get through? The Times has taken up this issue and I think that if anyone is overpaid and it is the IR fault, then they will not ask for repayment. I say, try this if you have evidence to back it up! Totally fed up with this system - the old one was better doing it through the tax code. I am sure that we are worse off than what we used to be. Anyone in agreement?

irs101 · 7 January 2005 at 12:37PM

Karenj

IR will only write off an overpayment due to official error if the recipient could not reasonably have realised they were being overpaid. As you say, your first overpayment was clearly an error that anyone would notice, as you did. So they wouldn't write that off.

What is your second overpayment due to? Was it due to an IR error as well, or just that you reported a higher income than the previous estimate? Remember that overpayments (and underpayments) are a normal feature of the system - IR were expecting over 1 million of them a year.

Tax Credits has never been administered entirely through the tax code - that's just one part of it (the family element) which replaced the Children's Tax Credit. And some people who were previously only on Children's Tax Credit do lose under the new system - the Government were clear about that. Under the old system, a family with a single high income were better off than a two income family earning the same amount. That was seen as unfair.

I'm interested that people still talk about difficulties getting through to the call centres. Apart from the problems in the first few months, IR are claiming a very high % of calls being answered within 20 seconds.

irs

deneka_2 · 7 January 2005 at 10:41PM

I haven't experienced any problems getting through to them in ages, but I constantly experience problems with being told different things, when you speak to different people.
This is something which really winds me up, I used to work for a mortgage company & got in serious trouble, if we didn't make a note of each telephone call, letter received etc. I don't understand why the IR can't do this either, really frustrating having to go back and explain your whole story, time & time again.
Still trying to dig all the old paper work out by the way, I thought it was all in one place where I could lay my hands on it, but some parts are missing, so I'll pm you as soon as I find them.

karenj · 8 January 2005 at 4:21AM

Thanks irs101. I am still confused. I thought that if you had informed the IR of their mistake and they still continued to pay, then that is an error on their part that they have not rectified, so not my problem, but theirs.

As for the tax code, I meant that I claimed the additional persons allowance only and not the old Working Family Credit, but I am certainly worse off than when I was before they changed the system!

I must admit I have not phoned them for some time, but I know for certain at the time the awards are sent, it is very very difficult to get through. Also, do you know what their geographic phone number is instead of having to phone an 0845 number which is more expensive???

Tax Credit Overpayments 03/04

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