Tax Credit Overpayments

Pykie_2

Hey you lot out there!

As a family we received Tax Credits going back to 2002/3 and 2003/04 and like lots of other people had a mountain of forms to fill in etc. We kept receiving the awards packs saying there were overpayments being collected from future awards etc. I finally wrote to HMRC saying "please don't keep sending us your award details etc as we haven't been eligible for any money since 2004". I now have received a letter saying we have been overpaid by £4,100 and because we are no longer getting any awards we want our money back!
I wrote to them asking for a detailed explanation of their calculations etc and got a reply back last week saying that they have acted "responsibly" and fulfilled their obligations, therefore are entiltled to ask for the repayment in full.
In the back of my mind I do remember a news report stating that the Tax Benefit system was in such disarray that the government had drawn a line under all olverpayments and were writng them off? (Anyone have any details?)
I spent around 5 hours on the phone yesterday speaking to various departments within HMRC to be told in no uncertain terms that " we fully intend to reclaim 100% of what we are owed", no consideration of current circumstances being as the alleged overpayments go back around 7 years etc.
The last port of call was to HMRC "payment plan" department who have asked me to supply details of income v expenditure to agree to a monthly payback figure, oh and make sure "you get back to us within 48 hours"
This can't be right surely?
Any advice as to this plight would be very much appreciated.

salau2

You need to contact HMRC and ask how they think you were overpaid tax credits. Generally this is due to not informing of a change of circumstances or a change in income. Once you have some details you can decide whether you think the overpayment is valid. If it is you can send them a financial statement showing how much you can afford to pay. If it was a joint claim you may only have to pay half the amount (if you and the partner have ended your relationship). If you think that you have not been overpaid you can dispute this. There is no right of appeal however, you can use formTC846 – available at the HMRC website – to dispute the overpayment. The HMRC can also write off the overpayment using discretion if it would cause exceptional hardship – again this would have to be shown.

zagfles

This sort of thing happened a lot in the early years of tax credits, which is why the last govt introduced the massive disregard at massive cost to the taxpayer.

The problem was even worse right at the start, because the forms for the first claim to the new tax credits were sent out in late 2002 for the 2003/4 tax year, but it asked for 2001/2 income ie 2 tax years old income.

So people might have been out of work/student/on low pay etc in the 2001/2 tax year, but by late 2002 could have been in a well paid job. So they fill their forms in in late 2002, give all the correct info including income for the 2001/2 tax year, and send the form off. They then got paid a lot in tax credits in 2003/4. They didn't inform TCO of change in circumstances because nothing had changed since filling the form in!

This was, and still is, a flaw in the operation of the tax credits system. Claims should ask what people are earning now, ie at the time they make the claim, or how much they expect to earn in the tax year, so payments can be based on that if appropriate (ie if the disregard is exceeded).

Pykie_2

Thanks to the two people who have responded to my initial Post.
Having pondered my situation for most of the day it dawned on me that as a family we could in fact have been eligible for some payments during the years that we didn't claim any. Would anybody out there know if at this stage I can submit income figures for both myself and my wife going back to say 2004/5 through to the present day to ascertain if indeed we were eligible for any payments?
I feel it is worth a go!
Also would anybody know what the award structures were for those years -say 2005 to present in terms of income thresholds and the like?
I have one dependent child, but through most of the years of "not claiming a penny" we had three children dependent on us and in full time education!
It could be that HMRC in fact owe me rather than vice versa.
I would take great delight in telling them that.

AnxiousMum

If you file a claim now, you will be able to have it backdated 3 months only.

QuackQuackOops

Pykie wrote: »

Thanks to the two people who have responded to my initial Post.
Having pondered my situation for most of the day it dawned on me that as a family we could in fact have been eligible for some payments during the years that we didn't claim any. Would anybody out there know if at this stage I can submit income figures for both myself and my wife going back to say 2004/5 through to the present day to ascertain if indeed we were eligible for any payments?
I feel it is worth a go!
Also would anybody know what the award structures were for those years -say 2005 to present in terms of income thresholds and the like?
I have one dependent child, but through most of the years of "not claiming a penny" we had three children dependent on us and in full time education!
It could be that HMRC in fact owe me rather than vice versa.
I would take great delight in telling them that.

Might be true but if you didnt claim it it wont be backdated. Even if you did claim it, it is only backdated 3 months.

stroodes

ahhhhhh am I the only one who is paying back overpayments? must be mad