Unavoidable Tax Credit Overpayments

jcnoodle

Hi Everyone,

I've been scouring the net for some info from someone who might have been in a similar situation to me for some time and have found nothing helpful. I'm hoping someone here might have some advice!

Basically, I have just received notification of a £1200 tax credit overpayment. This was from working tax credits paid last year. I was on a temporary work contract (maternity cover) for 7 months, so they estimated my income based on that figure, then I got a permanent job at the end of that period (in December) HMRC were informed immediately of this change and my expected income. Working tax credit payments were then stopped a few weeks later in January. Despite payments stopping, the large difference between my year on year earnings apparently resulted in a £1200 overpayment, calculated backwards as it is, paid before I even took the new position. Basically there was no way I could possibly have avoided this overpayment short of refusing to take the job

I'm hoping to take up a dispute with HMRC over this point, has anyone out there come across a similar case?

Icequeen99

jcnoodle wrote: »

Hi Everyone,

I've been scouring the net for some info from someone who might have been in a similar situation to me for some time and have found nothing helpful. I'm hoping someone here might have some advice!

Basically, I have just received notification of a £1200 tax credit overpayment. This was from working tax credits paid last year. I was on a temporary work contract (maternity cover) for 7 months, so they estimated my income based on that figure, then I got a permanent job at the end of that period (in December) HMRC were informed immediately of this change and my expected income. Working tax credit payments were then stopped a few weeks later in January. Despite payments stopping, the large difference between my year on year earnings apparently resulted in a £1200 overpayment, calculated backwards as it is, paid before I even took the new position. Basically there was no way I could possibly have avoided this overpayment short of refusing to take the job

I'm hoping to take up a dispute with HMRC over this point, has anyone out there come across a similar case?

Yes, it happens fairly often unfortunately. When you estimate a lower income, and your income turns out to be higher, there will generally be an overpayment. That is why using estimated income is a risk.

In such cases, even if you inform HMRC as soon as the income rises because of the design of the system, income is spread over the year and therefore can cause an overpayment retrospectively.

IQ