Tax Credits Overpayments collected then Remitted?

cardcrazyden

I've just been looking back through some of my previous tax credits awards and have noticed that that my final award notice for one year says:

"£196.21 has already been collected back from future awards"

If I owe this money thats fine I do not have an issue with it.

However, when the next year is finalised there is a breakdown Of the £196.21 which shows that £37.06 has been collected back (ie from the year just finalised) and £159.15 is an adjustment.

Why wasn't the £159.15 just shown as an adjustment the previous year?

Has anyone else noticed this on their own awards and why would the Tax Credit Office do this?

System

Because by that stage the previous year was finalised and no further action could be taken on that year.

cardcrazyden

Thanks Pam for that.

Does that mean that the £159.15 was eventually collected.

Whilst is said it was remitted it was not included in the calculations.

System

Look at it this way -


Year 1 - overpaid by £196.21

Year 2 - £196.21 being reclaimed so what you should actually receive in year 2 will be your entitlement minus £196.21

TCO decide to remit £159.15 of the £196.21 overpayment so what you actually receive in year 2 is your entitlement minus £37.06.

Check the money you actually received for year 2 and compare it with your entitlement that year. The difference should be £37.06. Also remember that you might have received a further payment for year 2 in year 3 after you submitted your annual declaration for year 2.

cardcrazyden

Thanks Pam

It makes sense now.

But why on earth do the TCO leave it 12 months before they decide to remit it. Surely it would be so much easier if they showed it as an overpayment and then remitted in that same year and put it in the calculations.

There must be hundreds of people that may think that they have repaid it.

After all that is what the paperwork seems to shows.

Lets face it if someone collects a sum of money and it is deducted from their allowance. Then the next year it says a bit of it was never collected but that figure is not included in the calculations. Aren't people going to disbeleive it has been remitted.!

Tax credits are so confusing