Overpayment Dilemma and Estimated Income!

Aphorism

What exactly is the situation with providing an estimated income for the year following a tax credit application?

To explain I have just received notification that I have been overpaid virtually an entire years worth of tax credit. Having phoned these chaps they advised that the amount was based on the previous years income (which was almost nil given that I was unemployed) and seemingly they ignored my estimated income that I had advised them when I phoned to check eligibility.

The initial claim was for the 50+ back to work element.

The odd thing is that the estimate I gave them (over the phone) was not considered in their assessment...which to me seems odd given that this was a back to work tax credit claim and it stands to reason that I would be earning more than zero!

I cant recall if there was a space on the application form (last year) for including an estimate for income...according to the very nice chap I spoke to at the tax credit helpline tonight there wasn't. I am writing to them to ask for a copy of the form I sent them.

Its all rather confusing I wonder if someone could clarify how they work this stuff out?

Thanking you in advance.

skateykatey

Basically what would happen is that, you telephone for a claim form and, based upon the info provided, one would be sent to you.

When the completed (by you) claim form was received back at the Tax Credits Office, your entitlement would be determined based upon the ino provided on the claim form. No account would be taken of the info you previously provided during your intial telephone call.

The claim form would not ask for an estimate of your current years income, only your previous years income; in your case this was nil.

Award notices would then be issued and these would have stated the income that had been used to determine your entitlement; they would have also asked you to provide an estimate of your current yearly income, or asked you to contact them if your income rose to X amount.

It's probably best that you hunt out your award notice(s) and check them; the retrieval of your claim form would be of no benefit to you.

Aphorism

Thank you for your prompt and detailed response.

This is the part I dont understand..as far as I was concerned I already had informed them of my estimated income for the year and that at the time of the award nothing had changed! They simply asked on the award letter "Income gone up? - tell us now...". I had only just started work I had not even received my first salary.

It goes on to say immediately after that statement "this does not usually affect your tax credits for this year".

I have sent off a request anyway for a copy of the form and the notes recorded from my initial contact with them...which I know they have as this was central to my discussion with them this evening.

skateykatey

I fully understand your frustration but tax credit claims are not, generally, awarded by one person.

Your original claim form would have been scanned by machine and those details then automatically inputted; there would be no human intervenation. Therefore, your original conversation prior to receiving the claim form, in which you provided an estimate would pretty much count for nothing as it is the details provided on the claim form that establish entitlement.

Ordinarily, your current year's income would have no bearing unless it increased sustantially; out of interest (and you don't have to answer) how much was your gross income???

ETA; I've just checked, if the increase in your income was more than 10,000 then the award would be based upon the higher income.

Also, from memory, the 50plus element was scrapped from April 2012

Basically, and you're not going to agree I know!, the responsibility to inform HMRC that your income was going to increase was yours and I can't see that you did so. I know that you hadn't received a wage at the time of receiving the award notice but surely you would have had an idea of how much your yearly salary would be.

Aphorism

Thank you again.

Thats more or less what the chap I spoke to tonight also said!

skateykatey

I take no pleasure in being right!

The tax credits system is a bit of a minefield and it's incredibly easy to fall foul of it

Depending on the level of your overpayment, it might still be worth disputing it as it may be decided that it's not worth pursuing...worth a shot!

Ring the helpline again and ask for the appropriate forms for disputing an overpayment (do not mention the word appeal as you will get sent the wrong form)

Good luck.

Aphorism

skateykatey wrote: »

Also, from memory, the 50plus element was scrapped from April 2012

Basically, and you're not going to agree I know!, the responsibility to inform HMRC that your income was going to increase was yours and I can't see that you did so. I know that you hadn't received a wage at the time of receiving the award notice but surely you would have had an idea of how much your yearly salary would be.

Actually I did have an idea of the expected salary which was declared during the initial contact with the Tax Credit Helpline, on which basis my eligibility was confirmed and the forms were sent out to me.

These same details are recorded in my file with the tax Credit office, again confirmed as per my discussion with them tonight.

The fact is that they did know, the details are recorded on their system but were not included in the assessment. So confusing...yes it sure is!

Prior to this I had been unemployed for a number of years and I really would not have been able to sustain myself during the initial period of employment without the help of this tax credit system as I had no money. From this perspective I am grateful as it helped me retain my job and actually progress to where I am now...the principles which I thought were the intent behind this initiative in the first place!

Surely it is better to be working and contributing than being unemployed and receiving!

Thanks again.

Pedent

Aphorism wrote: »

Actually I did have an idea of the expected salary which was declared during the initial contact with the Tax Credit Helpline, on which basis my eligibility was confirmed and the forms were sent out to me.

These same details are recorded in my file with the tax Credit office, again confirmed as per my discussion with them tonight.

The fact is that they did know, the details are recorded on their system but were not included in the assessment. So confusing...yes it sure is!

I think the key is the information shown on your award notice. That will tell you how much you've been awarded, and based on what income. If there are errors there then you're expected to let them know within 30 days, and if you don't do so then you'll be asked to repay any overpayment resulting from the errors.

Presumably your award notice showed your income as zero, rather than the amount you'd given as an estimate?

Aphorism

Hi Pedent and thank you.

Technically on the reward notice there did not appear to be any errors (amount for prev tax year at zero), except payment for tax credits I had not expected or requested. I think it is more to do with the information they did not include i.e. it did not state any reference to my estimate income, it did not say that this was not considered nor did it say it was...as far as I was concerned my estimate had been taken into consideration given that this was essential to the eligibility requirements.

I only just found out that the estimate is not considered...this is not mentioned in the forms or the award notices the only reason I now know this is because of my telecon with them last night and the forum contributors here.

Icequeen99

Aphorism wrote: »

Hi Pedent and thank you.

Technically on the reward notice there did not appear to be any errors (amount for prev tax year at zero), except payment for tax credits I had not expected or requested. I think it is more to do with the information they did not include i.e. it did not state any reference to my estimate income, it did not say that this was not considered nor did it say it was...as far as I was concerned my estimate had been taken into consideration given that this was essential to the eligibility requirements.

I only just found out that the estimate is not considered...this is not mentioned in the forms or the award notices the only reason I now know this is because of my telecon with them last night and the forum contributors here.

How much different was your estimate to your zero income? There should be a 10,000 disregard if your income has risen.

Are you saying that when you rang to get a claim form they asked you your estimate and therefore you thought they knew it? I can't see that argument getting very far with HMRC unfortunately.

But it is worth checking whether the disregard applies.

IQ

Aphorism

Icequeen99 wrote: »

Are you saying that when you rang to get a claim form they asked you your estimate and therefore you thought they knew it? I can't see that argument getting very far with HMRC unfortunately.

But it is worth checking whether the disregard applies.

IQ

Yes thats exactly what happened...I even discussed the notes on my records regarding that same conversation with the chap at HMRC on Monday evening. So the details of the estimate have been recorded, he read it out to me!.

On another point; when you declare your earnings for the last tax year do you provide the nett or gross amount?