Repayment of WFTC overpayment

maddipops

I was overpaid in 2009 by approx £3000 on tax credits, this was down to an error of simply ticking a box saying we received income support when we didnt, despite the rest of the application whenever income support was referred to we left those boxes blank. before anyone alleges fraud - it was me that called them as soon as I noticed they had me down for receiving it.

Anyhoo

I agreed that due to our extremely low income of £20,000 a year for a family of 5 - we would be allowed to take this money out of our future awards at 10% of the overpayment amount each year, so approximately £300 a year from our award. This arrangement has ran for approx 3 years no issue.

anyway - I have had a £2000 paycut at work so I called them to tell them this.

I was shocked to see that they have now sent me a new award where I will get more, but they are now taking £1800 off my award instead of the £300 a year.

so to summarize - I call them to tell them my income has dropped £2000 - so they increase the debt repayment by 600%.

I have called them and asked them to look at this decision - they wrote to me and said they cannot change their decision.

I have written to them to dispute this decision - they received my letter on 27/4/12 - I call them once a week but still they say they havent got it - I have proof of delivery and can see someone at their preston office has signed for it.

they were taking approx £6 a week off me for debt, they have now increased this to £35 a week. I am also approx £130 a month after tax worse off because of my paycut.

I have written a begging letter and they dont seem to care.

Does anyone have any advice? They arent regulated by anyone so I am at their mercy it seems.

karenx

If it was taken back at 10% per year that will take 10 years to repay. Surly the quicker it's paid the better?
They usually want it paid within 2-3 years. Do you have any letters saying they will accept payments at 10% per year?

maddipops

yes I have my previous 3 awards showing that they have taken £300 a year from the £3000 - I know its good to pay off debts quickly but this isnt for greed that I want longer to pay it off, its for the purpose of being able to feed the kids!

karenx

But do you have a letter from them stating that they will take it back at 10% per year?

Icequeen99

There are 3 rates of recovery 10%, 25% and 100%. The recovery rate depends on your circumstances. Evidently it appears that for some reason you have moved from the 10% group to one of the others.

HMRC have the power to do this in legislation. If you cannot afford living expenses like gas and electric then you can ask them to vary the rate of recovery but you will need to show evidence of hardship.

If you told them about the Income Support mistake and they did nothing about it, then it should be written off under their COP 26 responsibilities.

I would suggest you re-send a TC846 form, keep it simple and refer to the list of responsibilities in COP 26 and state that you met your responsibilities because you told them about the mistake on the award notice on 'x' date and they did not act upon that. ask them to listen to the phone call recording.

IQ

shedboy94

Icequeen99 wrote: »

There are 3 rates of recovery 10%, 25% and 100%. The recovery rate depends on your circumstances. Evidently it appears that for some reason you have moved from the 10% group to one of the others.

HMRC have the power to do this in legislation. If you cannot afford living expenses like gas and electric then you can ask them to vary the rate of recovery but you will need to show evidence of hardship.

If you told them about the Income Support mistake and they did nothing about it, then it should be written off under their COP 26 responsibilities.

I would suggest you re-send a TC846 form, keep it simple and refer to the list of responsibilities in COP 26 and state that you met your responsibilities because you told them about the mistake on the award notice on 'x' date and they did not act upon that. ask them to listen to the phone call recording.

IQ

Based on what the award hs been, it should always have been 25% recovery - 10% is for max awards, 100% for min awards and 25% for almost everything inbetween.

I very much doubt £3000 was paid inbetween the 1st payment and the 1st award notice with the incorrect info on it though, so unless a call was made after receiving the 1st award notice and this was ignored, then the dispute will more than likely fail.

DannyboyMidlands

But you don't tell us how much have they have increased your award by? Will your net income not be about the same as it was?

Icequeen99

shedboy94 wrote: »

Based on what the award hs been, it should always have been 25% recovery - 10% is for max awards, 100% for min awards and 25% for almost everything inbetween.

I very much doubt £3000 was paid inbetween the 1st payment and the 1st award notice with the incorrect info on it though, so unless a call was made after receiving the 1st award notice and this was ignored, then the dispute will more than likely fail.

Yes, I should have mentioned that about recovery rates, it doesn't look like they would be a 10% case.

I have had several cases where lump sums were paid between 1st payment and 1st award notice. But it is an exception rather than a rule.

However, in discussions with HMRC they have made clear that as long as you tell them the first time, the obligation doesn't keep arising on each subsequent notice. I have won several disputes on this. So as long as the OP told them within 30 days i can't see why the dispute would fail. Providing evidence they told them is another matter.

IQ