Tax Credit Overpayments Help & Discuss

Julee_2

This is my first message, but i just felt i had to reply to this topic. I'm so relieved, although it's terrible, that other people are going through what we have been for the last year and a half, as we thought we were the only ones. We were told at the end of the last tax year that we owed £6000-£7000-it changed several times in different letters! We had completed all the forms correctly and notified them of all relevant changes, but in recalculating our award THE COMPUTER, we were told!!!, did not take into account my husbands earnings so our award was based on my earnings alone! The change in amount we received was hardly any different so we did not think it to be 'overly generous' otherwise we'd have questioned it. We started off worried sick, but now we've realised how incompetent the system is we are just thinking, let them get on with it, they'll probably come out thinking they owe us some more!!! and if they don't they'll struggle to recover the money as we haven't got any to give them. The award was so measly in the first place we barely got by anyway. Don't let the b******s get you down, that's what i say!!!

tillie_2

Iam having a nightmare with Tax Credits, I have my own Ltd company of which I am an employee, drawing a fixed salary per month with pay slips, I also get tax credits. In the previous financial year the company was due a tax rebate of £800.00, however this sum was never paid evan though my accountant chased the Inland revenue for the funds, and after receiving a letter confiming the payment was due. Next my accountant received a letter
stating that the company had been overpaid by £1,300.00 which was employer funding so in effect a loan for my tax credit, so therefore they were keeping the £800.00 due and asking for a futher £300.00. So if I understand them correctly my company is funding the tax credits not the tax man, so in effect the company gave me a payrise which the company could ill afford.
How do other companies solve this one?.

susanthunt

We've also had horrendous problems with tax credits. They wrongly put down our nursery costs as £2000 per week - instead of per year !

When they sent us the form to check and sign, we made a note that
A. the nursery costs were incorrect
B. they were crediting us for 2 eligible children when we had three.

To be honest, we assumed it was a misprint and the form should have said £2000 p.a. Who pays that amount per week??? The form said payments would end if we didn't send back the signed form yet ...
our payments continued for 7-8 months (although they claim they didn't receive the form with the note about nursery costs etc. But, if they didn't receive it, why didn't our payments stop?????
Months later, they contacted us to say we had been overpaid by over £2000. (They now suddenly claim it's £4000 !)
We appealed and they said an overpayment had occurred so the appeal had failed but we could write in asking for overpayment not to be clawed-back since it was their error. We never received any response to that appeal about repayment. Last month we received a warning letter to say we must now make arrangements to pay. When we rang to say the case had not yet been settled, we were told that if we hadn't had a response we could assume we had lost the appeal.
Also, during discussions by phone, it transpired that a human doesn't check your form before payments start. I said it was ridiculous to think we paid £2000 per week to a nursery and asked whether the forms are not checked before payment starts. Reply - Quote: "Of course not. There are far too many. However, within a few months all claims are checked by a person and amended if incorrect!!"

susanthunt

Sorry, I should also mention that we are both self employed and our earnings turned out to be considerably less for the year in question - but we were told they can only backdate a claim for higher payment by three months.
It is wrong to base a self employed person's claim on anticipated earnings and then refuse to pay up if they earn less than that. (If you turn out to earn more than anticipated, they expect it paid back!)

susanthunt

Hi
Sorry - I'm straying well away from the tax credit discussion here - but the government is totally underhanded whenever it would benefit their coffers.
Okay - this is my soapbox but ....the government claims it wants to retain a post office network in Britain. Yet it is paying private firms millions of pounds in contracts for pushy advisors to telephone benefit claimants and persuade them away from the post office because payment into a bank account is a cheaper option for HMG.
Advisors are now even ringing people who have already switched to a post office card account asking them to reconsider banking since it would be "much more convenient" for them.
Okay, I feel better now. If you want any proof, please visit the NFSP website - at https://www.subpostmasters.org.uk

ejh1977

Just a quick message to say thank you, thank you, thank you to all the people who have contributed to this thread. I'm about to stop work, have baby and work for my (self-employed) husband's company from home and on the strength of what I've read today, I've been able to reach the following decision: I will not spend a penny of the tax credit money we end up with, but will stick it in a savings account and not go near it. Then, if by the time the child is 18, if there is anything there that hasn't been considered an over-payment, non-entitled payment, payment in error, or downright thievery from Government coffers, I will use it towards Uni fees, deposit on their first home, or rehab depending on how the child has turned out! (This is probably better than the stupid trust fund idea, whereby all the hard-saved cash is in the hot little hands of a wilfull teenager...) I think all your postings have saved me a lot of worry. I just won't spend the money until I'm sure the hunt's off! And to those still being chewed by the system, my fingers are crossed for you. Hassle your MP and try and get an article in the local paper to trigger responses to the paper and a further article?

irs101

Originally posted by Marigold123

Yes, but isn't a proportion of these figures the cost of setting up the new system itself, rather than actual payments to families with children?

No, that's purely the money they're paying out. Costing of setting up and running the system has been mentioned on her before. I can't remember what it is, but while you and I would think it big, it's small compared to the number of people the system is built for. And like you say it's a saving compared to the previous systems - but then it's our money, so the less they're spending on running the system the better, right? (As long as they get it right of course!)

I think you're a bit over-cynical. I'm not a big supporter of this Govt overall, but I think their intentions in this area were honourable. Of course the Govt. will benefit in the long run, but if they get it right, why shouldn't they? I would vote for any party who takes millions of children out of poverty, wouldn't you? But it's a big if....

It's also interesting that you say that the takeup was far higher than they expected. Presumably this is part of the reason that the system is now such a shambles. But how could this be if they had designed their sytems to cope with everyone who is ENTITLED to these payments? Could it possibly be that they were hoping many people who were entitled to claim Tax Credits would not claim them?

Well while take-up is high, the system still isn't dealing with the number of people it was designed for, because they still haven't transfered over around 1 million on the child elements of IS. So I don't think volume is the reason for the problems. But it's interesting that they've continually delayed the IS transfer - they're obviously still not confident in the system.

But, yes, take-up is high. They expected 6 million families to benefit. At one point it went up to 6.1 million, but dropped to 6 million in the Autumn because of the normal cycle of children entering and leaving the system (you see the same pattern in Child Benefit). It is the take-up of individual elements that is remarkably high. For example, 180,000 families received the old Childcare Tax Credit, now well over 300,000 families are benefiting. Same goes for the disability elements and the number of people getting WTC. That indicates to me that having the single claim form has had a huge effect & that more people are now getting what they are entitled to.

I don't think it's fair to accuse this Govt. of hoping that people wouldn't claim. They ran a massive marketing campaign and have regularly trumpeted the fact that so many people are getting what they entitled to.

I agree the scenario you dream of would be ideal, but the current system couldn't work like that because IR doesn't hold information on your household income. There is also a civil liberty point - the Government is actually quite restricted on the amount of information it can insist on collecting from you, and most of the time can't share it between departments. Setting a tax code is a much simpler business that assessing TC entitlement.

irs

irs101

Tillie

When a company is running TC Payment Via the Employer (PVE) they are performing two functions for IR - collecting Income Tax & NICs from all employees and paying out TCs to some employees. So if you pay out £100 in TCs, you take £100 off the IT you pay IR. Employers are not funding TCs - although they are shouldering some of the administrative burden, much to their annoyance. This is going to end soon anyway - everyone will be on direct payments from IR.

irs

irs101

Susanthunt said:
Sorry, I should also mention that we are both self employed and our earnings turned out to be considerably less for the year in question - but we were told they can only backdate a claim for higher payment by three months.
It is wrong to base a self employed person's claim on anticipated earnings and then refuse to pay up if they earn less than that. (If you turn out to earn more than anticipated, they expect it paid back!)

I agree, but they are the rules as they stand. I would always advise someone who is self-employed to put in a "protective claim" at the beginning of the year if they think there is any chance that they could be entitled. Same goes to employees with fluctuating income or a precarious job.

irs

fairenoughclough

I wonder if the overpayments are going to start again automatically in April 2005, like they did in April 2004.

:rolleyes:

This occurred because the system ignored the fact that we owed the revenue money and initiated payments at the level we had been paid(incorrectly) in 2003.

:eek:

Any ideas IRS