Tax credit clawback?

TCannoyed

Can anyone work out whether i have been paying tax credits back or not?

2003-04 Received £1762.56 CTC and £1891.24 WTC.

Should have received £1991.04 CTC and £95.54 WTC.

2004-05 Received £515.43 CTC and £1407.05 WTC.

Should have received £1460.07 CTC and £0 WTC.

By my reckoning that means i have been overpaid £2029.63

This year based on estimated earnings

I should receive £2241.10 CTC and £997.70 WTC

So far i have received £1144.66 CTC and £469.67 WTC.
(Roughly £43 each week CTC and £56 each month WTC)

My CTC (£43 pw) x number of weeks left in financial year adds up to the total i should receive. So i'm not paying any of that back yet.

My WTC however at £56 pm with 5 payments left this financial year = £230.
When added to the cash already received means i will have been given about £700 WTC this year. Therefore its nearly £300 short.

Is this £300 money i have paid back? If so at this rate its going to take another 6/7 years to pay them off.

Anyone any clues?

fatbelly

Hi - have you had an award notice recently? The answers will be on there, though not written in clear English. If you can post their phrases and amounts, I'll try to untangle it for you.

fatblokexl

rates of recovery are:
if you receive only basic family element £545 py they recover any o/pmts at 100% (you should get approx £40 but you dont get anything as this money has been diverted to help pay the overpayment off, could take several years depending on size of the overpayment)
if you receive max entitlement, i.e income for houshold is below £5200 (which means they don't taper your award) then they can only recover 10%
anything in between is 25%

call the helpline and ask for the outstanding amount, it is not as simple as it may seem to work this out so be patient, but as fatbelly mentioned your award notice will show the info. if is says anything thing like "amount recovered from previous years and amount to be recovered from future years" then you have been and are continuing to repay an overpayment.

remember though, if your entitlement changes, so does the potential recovery rate and therfore length of time before it is all paid off.

TCannoyed

from August says

WTC:

Full amount for period £997.70
Amount you owe us that will be collected from future years £1695.69
Less the amount we have already paid you for this period £300.65
Less the amount you owes us from previos years £1845.03
Less amount we have used in an earlier award period £99.69
Amount to be paid £448.02

CTC:

Full amount for period £2241.10
Less the amount we have already paid you for this period £669.30
Less we have used in an earlier award period £104.70
Amount to be paid £1467.10

All lokks a bit back to front to me. Im sure i can see some logic but its just giving me headache reading it over.

Thanks for any help.

donnalove

yep you have been overpaid by their estimates anyway.
now you have got to spend next few years paying it back.
you can appeal if you feel you didn't know you were being overpaid
ring helpline and ask them for appeal form.

CIS

If you want to fully understand the award notice, heres a guide to what each line means:

http://www.hmrc.gov.uk/manuals/ntcmanual/notices_award/help_exp1.htm

fatbelly

The trouble with these HMRC explanations is that you need someone to explain the explanation to you!. Correct me if I'm wrong but on CTC he's going to be all square at the end of the tax year but on WTC, in April 05 he owed £1845.03 and in April 06 he'll still owe £1695.69.

I'd be inclined to challenge the overpayment on a TC846, available here

Best wishes, TC