Repaying Tax Credits :(

Richard253

I have been self employed since 2001, in 2005 I became seriously ill and could not work, I ended up on incapacity benefits for six months at which point I was told I would qualify for the disability element of tax credits, so I changed over.

I am still recovering from my illness now and I am now using some of time to look after my parents who.

Last years business figures were dire to say the least, now HMRC are saying to me that because of the poor figures they cannot justify paying me tax credits as the hours I have claimed and the business figures do not add up. Consequently they are investigating.

At this stage I am assuming they will want some money back for what they see as an overpayment of tax credits.

My questions are, if I am earning less than what is deemed to be a living wage how can they still insist on me making payments to recover the money?

During my illness in 2005 I had to make myself bankrupt as the bank would not give me anytime to pay my bills etc, so I have no real assests to speak of, no house or car, only the tools I use for work, would it be better to make myself bankrupt again to write the debt off?

Many thanks