Tax Credits - HELP Plz. They tell me my income is wrong!

[Deleted User]

Ok so have posted on here quite a bit.

We have one income (mine) and my partner is self employed.

She made losses during 2011/2012 year and so we used the simple offset rule.

Tax credit have adjusted the income by looking at the PAYE we have paid on my wages and her small job early during 2011.

So now they are saying we can't have our tax credits from that period, as they know what we earnt.

There is a 10K difference at least due to the self employment losses.

What on earth do we do as we haven't finished our tax return yet :-/

System

The figures you declared should have been "estimated figures" since your wife hasn't done the 11/12 tax return yet.
When your wife does the self-assessment tax return she can then adjust the figures declared to tax credits. If they don't know she is self-employed or that she hasn't done her return yet they may have taken the figures as the "actual" 11/12 income and that won't match with the HMRC Paye system. Check with them and ask if the figures have been processed as estimated or actual. There was a box on the renewal form to indicate that estimated figures were being declared.

[Deleted User]

We did it over the phone, so I am concerned now that the advisor has recorded them as actual.

Does anyone know how to correct this situation, the return will be done today, so I guess we could send in a copy...

dseventy

assj wrote: »

She made losses during 2011/2012 year and so we used the simple offset rule.

Is it time to have a chat with her and explain that making full year loss is not sustainable? Perhaps she would be better getting a job? Even if its NMW?

As for the award, you need to ask for a full breakdown of what they have on record for income (estimated or actual) and work back from there.

When you have the figures, post back here.

D70

[Deleted User]

Ok well the loss is due to the first year of business.

We purchased a car under capital expenditure. We can claim 100% due to low emissions.

The business isn't a problem, as we don't need the income, but I'd set my expectations on th backdated tax credit award to help clear the sig. Anyway childcare would cost a lot as we have a 14 day old baby too.

:cool:

Icequeen99

When you get the final award notice for 11/12 and the provisional for 12/13 you will need to submit appeals against both stating that they have used the incorrect income figures.

Just out of interest, at what point did they use the PAYE income? Did they do it during the call and refuse to accept what you said about SA, or did they send you a letter saying the figures don't match and giving you an opportunity to clarify it?

As I say, appeal is the right process to follow (make sure it is an appeal form you get and not a dispute form).

It may take a while. It will be easier if you include the evidence supporting what you are saying, as well as a copy of their own TC825 guidance.

IQ

[Deleted User]

Icequeen99 wrote: »

When you get the final award notice for 11/12 and the provisional for 12/13 you will need to submit appeals against both stating that they have used the incorrect income figures.

Just out of interest, at what point did they use the PAYE income? Did they do it during the call and refuse to accept what you said about SA, or did they send you a letter saying the figures don't match and giving you an opportunity to clarify it?

As I say, appeal is the right process to follow (make sure it is an appeal form you get and not a dispute form).

It may take a while. It will be easier if you include the evidence supporting what you are saying, as well as a copy of their own TC825 guidance.

IQ

Thanks IQ - I was waiting for you :T

Anyway they sent me the final award with some strange income figures on, so I called to ask them what was going on. Turns out these were just the figures that I gave for my provisional at the start of that year.

BUT I started to ask them about the actual for the final award and to make sure they were correct. The advisor told me that they had not accepted my figures because they were wrong. Turns out they have checked my PAYE and taken that and the partners PAYE and taken that, added the self employment as 0.00, but not offset any of the self employment losses.

She advised me that I can complete a form when I get the notice to tell me of this, but she says I cannot do anything but appeal and prove my case. I was upset to say the least as I will clearly have to support my figures with a tax return and we are genuine!

Just really annoying! :cool:

Thanks

zagfles

Similar happened to someone I know, but in their case they raised an "enquiry" because the amounts they'd declared were different to the PAYE records. They had sent the TC825 with the annual declaration but apparently this was lost or thrown away. So they resent it with proof of what they were claiming for and they accepted this, apolgised and closed the enquiry.

Nick_B_3

An appeal may not be required. A declaration can be revised any time before the 1st specified date i.e. 31 July even if the actual figures are given. About the appeal -were you told to appeal because:
A) It is a final award being issued?
Your figures are not accepted?
If it a) then you could call back and advise you understand you can amend the declaration before 31 July and ask if you can amend your income figure. Also an appeal is not required for the current year as there are no restrictions on current year amendments if it agreed to amend it. If it is b) you may have to appeal however as I think any finalised award can be issued if it can justified which in this case it may be. If we had passed 31 July then you would have to appeal.

Icequeen99

Nick_B wrote: »

An appeal may not be required. A declaration can be revised any time before the 1st specified date i.e. 31 July even if the actual figures are given. About the appeal -were you told to appeal because:
A) It is a final award being issued?
Your figures are not accepted?
If it a) then you could call back and advise you understand you can amend the declaration before 31 July and ask if you can amend your income figure. Also an appeal is not required for the current year as there are no restrictions on current year amendments if it agreed to amend it. If it is b) you may have to appeal however as I think any finalised award can be issued if it can justified which in this case it may be. If we had passed 31 July then you would have to appeal.

Nick B is right in theory, they can amend until 31 July. However, this is part of a compliance intervention and in most cases I have seen, HMRC won't amend the figures.

That said, no harm in trying the helpline again and telling them they have made a mistake and ask them to amend the figure. I suspect they won't be able to do so if there is some sort of compliance marker on it.

Did you send in the TC825 with your form?

IQ

[Deleted User]

Thanks all for the replies.

IQ - I did it over the phone.

I asked them to amend it today and they just said no, wait for the form, complete the appeal form.

I don't mind having to wait as long as they don't rob me of what I am due. I always seem to be the one that looses out when others take the p.