Tax Credit Overpayment Dispute - How to speed up process?

Judes1727

Shedboy/Icequeen - many thanks for your replies, I really do appreciate you taking the time.

Maybe I should have checked what my husbands accumulated income was...however it was only my income that was in question at the time and it didn't really cross my mind. In hindsight I should have checked.

However, I've looked back at my awards and the figures just don't seem to tie up.

Income £31k - amount to be paid £5018
Income £25k - amount to be paid £5448 (the amended award received after my notification of drop in income)
Finalised Income £31k - amount to be paid £3301

Why the big drop from £5018 to £3301 based on the same income?

Also, the amended notice from Feb 2011 states I'm due to be paid £382 up to the tax year end (based on the lower income figure). So why is my overpayment £1500, not £382 ?

Again, thanks for responding.

Judy

shedboy94

Judes1727 wrote: »

Shedboy/Icequeen - many thanks for your replies, I really do appreciate you taking the time.

Maybe I should have checked what my husbands accumulated income was...however it was only my income that was in question at the time and it didn't really cross my mind. In hindsight I should have checked.

However, I've looked back at my awards and the figures just don't seem to tie up.

Income £31k - amount to be paid £5018
Income £25k - amount to be paid £5448 (the amended award received after my notification of drop in income)
Finalised Income £31k - amount to be paid £3301

Why the big drop from £5018 to £3301 based on the same income?

Also, the amended notice from Feb 2011 states I'm due to be paid £382 up to the tax year end (based on the lower income figure). So why is my overpayment £1500, not £382 ?

Again, thanks for responding.

Judy

Being totally honest, it is impossible to say for sure without seeing the exact details of your claim.

Icequeen99

On the 3 notices you mention you say 'amount to be be paid'.

Instead, what is the total entitlement figure shown on the front of the notice for WTC and CTC.

if the figures are different on two notices at the same income levels, then there must be something different in the calculation.

You need to check the section on each notice that shows how they have calculated it. It will show your personal circumstances, check those on the two notices and compare them.

Then it will show the elements included e.g. Working Tax Credit for 365 days. You need to compare the two notices for that as well.

There will be a difference somewhere. But make sure the figures you quote in your last post are the actual entitlement figures and the amount due to be paid or relating to only CTC/WTC and not both.

IQ

Judes1727

Thanks again for your replies.

I've done a spreadsheet summarising my past 3 notices. The WTC entitlement (childcare only) has gone down but I understand why.

My CTC entitlement remained the same for the whole year but I can't understand the differences in the 'reduction due to income'.

Entitlement £5,644
Reduction £957 when total income £31k
Reduction £991 when total income £25k
Reduction £2508 when total income £31k

It's this last 'reduction due to income' in the Final decision notice which has caused the huge overpayment. Why is there such a big difference (£957 to £2508) based on the same income figure?

Does anyone know how this figure is calculated? Do the 2 elements (WTC and CTC) get calculated seperately or is there some correlation?

If I want to query these figures do I use the appeals process?

Sorry for so many questions, just need to get clear in my head where I need to go from here.

Cheers for any help.
Judy

zagfles

Judes1727 wrote: »

Thanks again for your replies.

I've done a spreadsheet summarising my past 3 notices. The WTC entitlement (childcare only) has gone down but I understand why.

My CTC entitlement remained the same for the whole year but I can't understand the differences in the 'reduction due to income'.

Entitlement £5,644
Reduction £957 when total income £31k
Reduction £991 when total income £25k
Reduction £2508 when total income £31k

It's this last 'reduction due to income' in the Final decision notice which has caused the huge overpayment. Why is there such a big difference (£957 to £2508) based on the same income figure?

Does anyone know how this figure is calculated? Do the 2 elements (WTC and CTC) get calculated seperately or is there some correlation?

If I want to query these figures do I use the appeals process?

Sorry for so many questions, just need to get clear in my head where I need to go from here.

Cheers for any help.
Judy

All those reductions look to low - on £31k with 2 children you should get very little in tax credits unless you were claiming childcare or have any disabilities - were you? If so what amounts/elements?

Can you list the WTC elements on the award notice too - even though you didn't get any WTC these are relevant to the CTC calculation.

Icequeen99

Hard to say without seeing the figures.

But you say that the childcare went down between the first and third notices. If that is the case, that will affect the reduction due to income figure on CTC.

For example (using really easy numbers!), with 31,000 of income your reduction due to income would be £9,586. The first 4600 would be set against WTC (basic, couple and 30hr). The remaining 4986 would be set against Child Tax Credit. This of course is a basic case.

Now lets presume you add in £125 per week of childcare costs, giving you a childcare element of £5200. Again, the first 4600 is set against the WTC elements, but the next 4986 is set against the childcare element of WTC. Meaning there is no reduction due to income on CTC>

If you were then to reduce that 125 childcare costs to say 75, it would be 3120 childcare element. So again first 4600 against WTC elements, then the next 3120 against the childcare element, leaving 1866 to set against CTC.

So what this shows is that the reduction in income figure against CTC will change depending on what childcare costs you add in. Similarly, if you were disabled and had a disability element in your WTC it would affect CTC.

That is why I am always saying on here (along with Zagfles!) that just because you don't get any childcare element doesn't mean that you don't get anything extra, you might be getting more CTC.

Of course, this might not explain it, but it is the first thing to check anyway!

IQ

Judes1727

IQ/Zagfles - again I appreciate your replies. Think I'm starting to get my head round this!

I did claim for childcare (no disability). Here is all the info from the 3 notices in question (couldn't paste a spreadsheet unfortunately!).

1st notice - Income £31868
WTC
Basic £1923.55
2nd adult £1890.70
30 hour £792.05
Income reduction £4606.30
Entitlement nil
WTC Childcare
Childcare £4693.07
Income reduction £4360.74
Entitlement £332.33
CTC
2 children/basic + baby £5644.30
Income reduction £957.65
Entitlement £4686.65

2nd notice - Income £25372
WTC
Basic £1923.55
2nd adult £1890.70
30 hour £792.05
Income reduction £4606.30
Entitlement nil
WTC Childcare
Childcare £2589.13 (I know why this was reduced)
Income reduction £1793.05
Entitlement £796.08
CTC
2 children/basic + baby £5644.30
Income reduction £991.89
Entitlement £4652.41

Final notice - Income £31340
WTC
Basic £1923.55
2nd adult £1890.70
30 hour £792.05
Income reduction £4606.30
Entitlement nil
WTC Childcare
Childcare £2589.13
Income reduction £2423.64
Entitlement £165.49
CTC
2 children/basic + baby £5644.30
Income reduction £2508.55
Entitlement £3135.75

I know I've taken up a lot of your time already but if you get a chance can you look at the above figures and advise if you think they look about right.

Still reeling at the fact I could rack up a £1500 overpayment in less than 2 months after (wrongly) reducing my income to zero while not reviewing my husbands....but they did have the correct income figure for 10 months!

Thanks again for your help. You should work for the Tax Office as you've explained it better than they ever have.

Judy

zagfles

Your problem seems to be the drop in childcare entitlement between the first and second notices. Why and when did this happen? You say the second notice was in Feb but the drop in childcare looks too much for it just to reflect a change from Feb onwards.

Judes1727

I had been receiving Maternity Allowance (from DWP rather than Mat Pay from an employer), so when this stopped and I didn't have new employment (new job started in the new tax year) the Childcare element of WTC was stopped.

I advised TCO of my maternity allowance ending, together with the reduced income figure at the beginning of Feb but the effective date of the childcare element stopping was 26th Nov. Has this contributed to the overpayment?

This is like peeling an onion to find all the layers beneath!

Thanks again.
Judy

Icequeen99

Yes, that is what contributed to the overpayment. You reported the maternity allowance ending in Feb, along with childcare, effective from November. So you were overpaid childcare element from November to February. Then on top of that the overpayment due to the rise in income.

I am struggling to see any grounds for a dispute here.

IQ