Tax Credits Overpayment - Please Help

spongebob69

Hi all,

Just signed up today so please be gentle with me

In 2005 me and my partner were claiming Tax Credits of around £100 per week for our first child of which £70 went to our sons nursary. If i can remember correctly, the annual review was due back in September and me and the missus both agreed that we would not send the review back, because we owed some money so our payments would stop, and any monies we owed would be taken from what we should have been getting. In Oct we got the letter saying our payments have stopped then soon afterwards we received a letter saying we had to pay back all the money we was given which was just over £2700. I phoned tax credits and they said it was a legal requirement to send the review back on time, and that there was adverts both on the radio and tv stating that we would have to pay all the money back if we didn't send in the Annual Review. I told them we never knew that, we was young and niave, but they said the only thing we can do is appeal. So we sent in an appeal and obviously they rejected it saying we should have been aware and its all our fault and the money has to be repaid. I asked could we repay from future awards and they rejected this also

Every year since 2005 we got a letter from HMRC saying we had to pay or we would go to court but we ignored it until NOV 2009 when a HMRC Tax Collector visited my home and said it has to be paid otherwise he will advise that HRMC go to court and we would lose in no uncertain terms . He told us this would mean we would get a CCJ. He told us we had one final chance to appeal so he would put the debt on hold then if that wasn't successful then we had to pay up and he was looking for a minimum £175 per month. With christmas fast approaching and two kids now to feed we didn't send it back hoping to delay repayments for a while but yesterday we got a note saying he has been round so obviously thins are going to come to a head very soon.

Both me and my partner acknowledge that we owe some money but not the full £2700!!!

I was wondering if anybody else is going through this situation with HMRC and whether i should just pay back the money (would be a real struggle to find it) or go to court and fight it?

Any advice would be much appreciated thanks

Vader123

I am afraid you have done yourself a massive dis-service by not renewing when you knew you were overpaid, and ignoring letters from HMRC for 4 years!

Some questions:

You never disputed the amount until you had a home visit?
Why were you overpaid?

Vader

spongebob69

We disputed the amount as soon as we got the first letter. Phone calls and the initial appeal.

We were overpaid because our son started school in the September so our nursary fees stopped and I had a pay rise in June. But we wasn't overpaid £2700 we stupidly thought that by our payments stopping in Oct and starting up again in April we would have cleared any overpayment.

moomoomama27

I'm afraid you do owe the money in full, because it is a legal requirement that all the forms are sent back within a time frame stated in your paperwork (normally by July 31st). Because you failed to send the paperwork back you in effect nulled your whole entitlement, and therefore weren't entitled to any of the money.

It's harsh, I guess, but then it is literally everywhere (radio/tvpaperwork through the door), that it really won't 'wash' that you didn't know you had to renew.

I personally know of someone who did the same as you, and they too did have to pay the amount back in full over a period of time set by the courts.

I guess probably your only option is to go to CAB and see what advice they can offer you But I would urge you not to keep putting off making contact with them, or avoiding them, because costs can mount up to more if they do decide to take the debt to a collection agency.

spongebob69

Thanks moomoomama27. We knew one day we would have to repay this money but £175 is a lot of money each month to be paying out because of a silly mistake Suppose it would be better to get this sorted out and start paying instead of keep putting it off and worrying about it

AnxiousMum

Part of the overpayment too will include payments made from April of the year you didn't send in renewal papers till July 31st - as they would've kept on paying you until then in the anticipation of receiving your renewal pack.

moomoomama27

spongebob I agree £175 is a massive amount to pay when you are on a limited budget. Honestly try giving CAB a call or make an appointment, they will be able to advise you on the ins and outs, and maybe also advise how you can negotiate paying less back per month. I'm no expert, but I know that the person I know was able to negotiate to pay back the debt, but at an amount that meant she did not suffer too much finacial hardship.

System

Unfortunately you are liable for the full £2700 because you failed to renew your claim. TCO will not accept ignorance and naivety as a plausable reason for not renewing when the instructions were clear on the annual declaration form and a helpline number provided should you have wanted advice.

The payments you received from April in the year the renewal was due until the termination date were "provisional" payments. They were made to you provisionally whilst they waited on you to complete the renewal process and confirm the previous years income.

Ironically if you had just renewed it and kept it live you might not have received any money as they clawed back the smaller overpayment you had previously accrued. But in having a continuing live claim there was the facility to recover that initial overpayment. By allowing the claim to terminate you gave TCO no way to recover the overpayment and you managed to make the overpayment considerably bigger. It is not possible to recover an overpayment from any future new claim made though you could have arranged time to pay the overpayment back, using direct debit, and used any future tax credit payments to fund that.

TCO have obviously being trying to get you to do something since then but you have repeatedly ignored them. Your options now are either to contact CAB and get advice from them or try to arrange time to pay with TCO. Either way you need to do that now before court costs and a CCJ add to your troubles and drastically affect your credit rating.

I do not think another appeal will help but there's no harm in trying providing you can give them new evidence to support your dispute. However TCO will expect you to start paying back immediately as they have already suspended proceedings to give you a chance before and you did nothing about it.

Please please get help now. If you try to arrange time to pay with TCO there is an income and expenditure form they can give you to gauge how much you can afford to pay per month. You just need to contact them and negotiate.

spongebob69

Many thanks for all your comments. I will make an appointment at CAB for as soon as possible to see what can be done with regards to lowering the amount we have to pay back. As they say you learn by your mistakes

moomoomama27

Good luck, update us on how you get on with that.

Sucker_for_sweeties

spongebob69 wrote: »

Many thanks for all your comments. I will make an appointment at CAB for as soon as possible to see what can be done with regards to lowering the amount we have to pay back. As they say you learn by your mistakes

Spongebob, please just start talking to the HMRC. If it has to be sorted then try directly with them to do it in the most manageable way you can.
Hopefully they will help you pay it back in manageable chunks, if not ....an elections coming...speak to your MP. Give HMRC a chance first though they usually only go so far when they've exhausted the other ways of getting what they want.
A website I've found helpful is
tax credit casualties.

I don't think I'm allowed to refer them, but it's free and run by people that have been through the overpayment mill. They will certainly be able to help you stop/postpone/deal with the immediate court problem, then offer great advise for getting through this.

Well done on taking the first step to deal with an issue that will never go away.