Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • connieisher
    • By connieisher 14th Mar 17, 3:52 PM
    • 7Posts
    • 0Thanks
    connieisher
    Tax Credits overpayment, self employed, please someone HELP!
    • #1
    • 14th Mar 17, 3:52 PM
    Tax Credits overpayment, self employed, please someone HELP! 14th Mar 17 at 3:52 PM
    I have been claiming tax credits since 2007 and from 2009 my husband has been self employed. It has always been difficult to estimate his future years income. I have always got it wrong by a few grand, that has never been an issue. Tax credits always reduced my entitlement the following year so they retrieved any over payments.
    In 2013 my husband was made redundant, I informed tax credits as soon as my husband was made redundant and what my husband had earned so far for that year (£3,000). As soon as he found work again (self employed ) I informed them and increased his estimation by £1,000. At the end of that financial year I gave them his gross £7,100 & net £4,500. When I received the letter confirming our income it said £7,100 I phoned and appealed to get it changed they refused.
    I them estimated £15,000 for following year as I or my husband didn't have a clue we calculated his past 6 weeks income and went on that basis. He ended up earning 19,000 I had received overpayment and believed it would be taken of my future entitlement like it had done in previous years. I then know and my husband knew the following year he would earn a few bonuses. So I estimated £25,000 he ended up earning £30,000.
    I then received a letter informing me I now owe £9,000. Each year when I received a letter informing me of overpayment I believed it was a ground total not an individual overpayment for that one particular year.
    I'm confused as why I have not had this issue before when I have underestimate.
    I have phoned tax credits and they have been very unhelpful. I was informed by one guy that I need to start paying £170 a month back. I have explained I cannot afford that. I have gone through my expenditure with tax credits and I can't even afford £10 a month but have informed them to take £10 a month anyway. Just to keep them happy. They informed me that I will have to increase that soon.
    I have appealed this overpayment and contacted my local MP.
    I received a letter from houses of parliament yesterday, they have reduced the first year overpayment from £3,500 to £1,500 , I have apparently payed £900 and the rest of my overpayment still stand.
    This year it looks like my husband will earn around £18,000 and my earns will always be £10,000. I really don't know what to do. I'm not a book keeper or clairvoyant I have found this completely stressful and i don't know what to do. Please can someone help me.
    Why have I never had trouble before even though I have underestimate by £5,000 back in 2010. It has only happened since 2013.
Page 1
    • Darksparkle
    • By Darksparkle 14th Mar 17, 4:13 PM
    • 4,265 Posts
    • 2,712 Thanks
    Darksparkle
    • #2
    • 14th Mar 17, 4:13 PM
    • #2
    • 14th Mar 17, 4:13 PM
    The income disregards for income increases have changed over the year.

    It used to be £25,000, reducing to £10,000 in 2011, £5,000 in 2013 and £2,500 in 2016
    • connieisher
    • By connieisher 14th Mar 17, 5:26 PM
    • 7 Posts
    • 0 Thanks
    connieisher
    • #3
    • 14th Mar 17, 5:26 PM
    • #3
    • 14th Mar 17, 5:26 PM
    Thank you for your response. Stupidly I trusted HM Revenue to reduce my entitlement like in previous years to payback any debt I may have occurred? But I was never made aware that this debt was building up. It's only this year that I have been made aware. I don't understand that being self employed is hard to make a judgement on what will he earned but they have never done this in the past. I have no debt from 2009 to 2013?
    • Darksparkle
    • By Darksparkle 14th Mar 17, 5:36 PM
    • 4,265 Posts
    • 2,712 Thanks
    Darksparkle
    • #4
    • 14th Mar 17, 5:36 PM
    • #4
    • 14th Mar 17, 5:36 PM
    Did you read your awards notices each year? Any overpayments would be outlined there.

    Yes it can be difficult for the self employed to provide an accurate estimate but an unreported increase of income of £5,000 is not small or unnoticeable.
    • Darksparkle
    • By Darksparkle 14th Mar 17, 5:44 PM
    • 4,265 Posts
    • 2,712 Thanks
    Darksparkle
    • #5
    • 14th Mar 17, 5:44 PM
    • #5
    • 14th Mar 17, 5:44 PM
    Also when you mention net income, are you referring to net profit or net after tax/nic?
    • connieisher
    • By connieisher 14th Mar 17, 6:20 PM
    • 7 Posts
    • 0 Thanks
    connieisher
    • #6
    • 14th Mar 17, 6:20 PM
    • #6
    • 14th Mar 17, 6:20 PM
    Hi, yes I did read over payments but how I interpreted was carrying over from previous years to date not just exclusively for that year. There was never a break down on the final statement balance until this year? Net profit not net after tax.
    I just was unaware of the changes that were brought in 2013 onwards. I have always under estimated even though I have tried so hard to over estimate and usually tax credits have reduced my entitlement so it pays for previous years error.
    I just lost at to having to pay so much back. Don't get me wrong I expected to pay some back £2,000 to £3,000 perhaps but £9,000 I'm lost.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

880Posts Today

7,389Users online

Martin's Twitter