tax credit pay back?

naturegirl_2

Just before Xmas I received a letter saying I have to pay back all last years tax credit as I had not sent in my income details for that year (self employed) I remember getting a letter saying my tax credit would be stopped but because didnt realize they would also do this.As I didnt reply they have decided that I was overpaid for the whole period. I had the option of objecting which I did and have now been sent a form. What is the best way to deal with the situation? I didnt send my income details as I am still going through the paper work and have not finished the book keeping (Im not very good at it)
any advice would be well received

System

I'm afraid it's unlikely your dispute will be unsuccessful. The Annual Declaration which was sent to you was very specific about returning all your details on time.

If you were unsure of your actual income because you were self employed then you could have called the TCO to let them know what was happening and supplied a more accurate estimate and then when you had the definite income you could have updated the figures.

If you just put the form aside then once the deadline passed your award was automatically stopped and you were asked to send back all the money you were paid. To get the payments reinstated from now you need to make a completely new claim.

Tom_Saunders

tell them you didn't understand, how it will cause you financial hardship and you'll probably lose your house and your kids will be left homeless.

Trust me it works !

naturegirl_2

Hi Tom I didnt understand. I was late last year and just phoned them with the info ,I was not asked to send in any paper work at all and they never mentioned that I would have to pay back anything if it was stopped. So it was a complete shock when I got the order to pay back. Even when I did phone the advisor told me I should appeal and gave me her name too in case it would help.

System

Unless you're on benefits I don't see how claiming hardship will get them to write off the overpayment completely. Claiming hardship when you have an income will result in them asking for full details of your income and expenditure before they work out how much to ask you to pay back per month.

Re: being late last year. The advisor on the phone at that time had no reason to warn you that you could be asked to pay everything back since you rang up in time to give them the details. As I understand it from your original post this time you didn't ring up at all and just put the Annual Declaration aside.

You get payments for a year based on an estimate of what you think your income will be in that year. The whole point of the Annual Declaration is that at the end of the year you have to confirm what your actual income was so that the TCO can work out if they have paid you too little or too much. Whilst the TCO is waiting for you to send in your Annual Declaration it makes provisional payments to you from 6 April in the new tax year based on the income figures it has at that time. This is so that you have continuing payments and to avoid hardship.

When you return your Annual declaration with the previous years actual income figure the TCO then uses those more accurate figures as the estimate for the new tax year.

If you don't follow the instructions on the Annual declaration and send it in on time then the TCO has no idea if they paid you the correct amount in the previous year and no idea if the current award is based on the correct income. So the claim is automatically stopped and you will be asked to pay back all the provisional payments made to you.

Tom_Saunders

I promise you the overpaid me by over £1500. I told them I'd lose my house, marriage etc, the wrote back apologising saying it was thee fault and wrote it all off.

This Government cannot be seen to putting low paid familes into deby because of the their bloody stupid system.

Everyone between £10-15,000 should get one figure and go up in blocks of £5k. Not the bloody stupid system we have at the moment which encourages people to lie and not work overtime.

naturegirl_2

I thought because I had not contacted them they would not be sending me any further payments which they did warn me by letter that they would stop payments. so if they stopped payments how can they say I owe them for that period? I wish in a way I had never bothered with them in the first place because even when I was sending the info in they said I was over paid and was reducing the amount I received monthly to pay it back automatically. Reading other threads on over payment Im not the only one with this problem.
I will read through all my paper work tomorrow and finish my accounts and get it sorted asap. thanks for help

Randall_Flagg

Pam17's thread is spot on except it misses one potentially vital point. Your response to the annual declaration is intially required by the date specified on the form (likely to have been 31 August). Failure to respond at all will result in the provisional payments from 6 April being stopped and recovered. However, there is also a second date for response The second date is the 31 January after the 31 August date. If the claimant responds after the first date but before the second date and has good cause for being late, the response is sufficient and a claim is treated as made from the previous 6 April date. The provisional payments are offset against what is due under the award and there is no overpayment.

The question is whether you have good cause for being late. Being self-employed and struggling to sort your accounts seems reasonable but it will depend on what guidance is being followed by TCO.

You need to contact TCO and explain why you are late and ask them to consider the good cause provision. At the same time you also need to supply the information they require and you need to do all this on or before 31 January 2007.

Technical Info here

naturegirl_2

Thanks Randall, I started working on the accounts yesterday and hopefully will finish them tonight. I thinks they have offset payments due in previous years as I always seem to be paying them back overpayments from the previous period.!!! Well its taught me a lesson and no mistake. New Year Resolution Keep up to date with the accounts and reply to all letters!!

naturegirl_2

I've just printed out the tech info you made available too thanks

DazzerG

Tom_Saunders wrote:

I promise you the overpaid me by over £1500. I told them I'd lose my house, marriage etc, the wrote back apologising saying it was thee fault and wrote it all off.

Not the bloody stupid system we have at the moment which encourages people to lie and not work overtime.

1) This is assuming HMRC made a mistake.....clearly from OP statement, he made the mistake.

2) Overtime? Unless your overtime is worth £25000+ then your TC wouldnt change.