Need Advice Regarding £2743.93 "Overpayment" - HELP!

kevmcfad

:eek: I need help fast because as it stands at the moment HMRC are demanding that an overpayment of £2743.93 is paid immediately. :eek:

Long thread sorry!

Several months ago I received my tax credit renewal which I filled in and submitted before the deadline. A few weeks later I received a letter informing me about the "overpayment". This shocked me because I don't have that kind of money lying around and I couldn't understand why there was such a high amount of overpayments. I called HMRC when I received this letter (which was after the 31st July deadline) to find out why this was the case and it was only then that I realised the error.

This award was a joint application with my wife who is employed. The renewal form asked for her INCOME so I copied over her income amount from her most recent P60 to ensure accuracy, however I am self employed and this is where the problem came from. My most recent self assessment has been submitted to HMRC so I know my exact income. Again I wrote my INCOME into the appropriate section of the renewal form before submitting it - This is what the form asked for after all. When I phoned HMRC in August to gain clarity regarding the overpayment the man I spoke to informed me that I should have wrote my NET INCOME into the appropriate section of the renewal form. I asked him if this is what caused the overpayment and he said "yes". He also informed me that he'd raise this issue with his manager.

On 5th September I received a letter from HMRC informing me that "you cannot appeal against this decision to pay back an overpayment". I immediately called them and spoke to "Emma" and again I explained my problem but she was having none of it. She informed me that the £2743.93 overpayment was for the last tax year and there was nothing I could do to reverse the decision unless I went out my way to fill in dispute forms and hope that HMRC wiped my overpayment. :mad:

FYI My gross income for last year was around £25500 but my net profit was only £10914, hence the mistake. It may also sound that I received a big monthly payment from HMRC last year but I didn't because they were clawing back the "overpayment" I made from the previous year!

In my opinion the renewal form is very misleading and this meant I inputted the wrong figure into the "Income" box, even though I tried to be as accurate as I can and whenever there is a change to my family's circumstances I always immediately inform HMRC to ensure accuracy regarding my tax credit payments. As far as I'm concerned the term "income" means gross income (or takings) and NOT "net income" unless it specifically says which the renewal form did not!

This is a very worrying time for my family as I only work part time hours (my income has reduced massively since last year) and my wife doesn't work full time hours either. We have 2 young children, we are constantly living in our overdraft even after my wife gets paid and a few days ago I went to the supermarket with 50p in my pocket to buy a 47p Tesco value loaf of bread. There is absolutely no way we can afford to pay back this amount of money, even in instalments, and I will fight this as much as I can but I do need as much advice as I can to help us.

We would really appreciate anyone's help.

enabledebra

This shouldn't be a problem- if you notified them of the error within 30 days of getting your finalised 11/12 award notice showing the incorrect income figure you supplied?

Edit- OK to challenge this you need to put in appeal asap.
Don’t ‘dispute’ the overpayment. A dispute is when you agree you have been overpaid but don’t think it’s your fault. When you disagree that an overpayment has happened (eg because the wrong income has been used) you need to ‘Appeal’. An appeal and dispute are not interchangeable but HMRC staff always seem to advise a ‘dispute’ whatever the issue.

Here is how to appeal (just explain what has happened but do it via the correct paperwork explained in the link below - you can also request a recording of all calls that you made to HMRC if you need this to prove you told them of the error within 30 days)

They will try to get you to withdraw the appeal if it is made after the 30 day limit- (politely decline- even if they tell you they will sort it out another way only withdraw the appeal once you have in writing the overpayment is removed) You should also request that recovery of the money is suspended until you have a response to your appeal.

http://www.advicenow.org.uk/advicenow-guides/problems-with-benefits/tax-credit-overpayments/how-to-appeal,10214,FP.html

kevmcfad

They took so long to get back to me after I raised my concerns that 30 days has long gone. The first I knew about the overpayment was on my Finalised Reward Notice which was dated 9th August. I called them immediately after I received this and the next letter I got from them was dated 27th September.

enabledebra

kevmcfad wrote: »

They took so long to get back to me after I raised my concerns that 30 days has long gone. The first I knew about the overpayment was on my Finalised Reward Notice which was dated 9th August. I called them immediately after I received this and the next letter I got from them was dated 27th September.

See my edit above- if you called them within 30 days this should be enough- that they didn't act on it and correct the error is their fault. All calls are recorded. Get an appeal in asap - it should be made within 30 days also but can be looked at up to 13 months later- explain that it was their response and misadvice to 'dispute' etc. that delayed your appeal. And whatever you do don't agree to withdraw the appeal.

kevmcfad

Thanks, I'll get this done tomorrow

kevmcfad

I took your advice enabledebra

I sent them a letter, the day after you gave me your advice, via recorded delivery detailing EVERYTHING including the exact dates, times, cost and length of my phone calls to the Tax Credit Office from my BT bill.

I informed them that I am appealing against the overpayment and that in my opinion they did not act soon enough to fix the mistake.

UPDATE - They have not acknowledged receipt of my letter and on Friday 26th October my wife and I received a "Notice of Pay" letter informing me that I have until 1st December to pay £2743.93! I can't even afford to pay this up over 12 months. Last week we survived on Tesco Value bread (47p), Tesco Value pasta (30p) and Tesco Value beans (33p) and I am now getting VERY WORRIED!!!

The last time we received any Child Tax payments was on 20th July 2011. Since then they've stopped our payments to claw back an apparent overpayment from the previous year!

Icequeen99

Firstly, you need to contact the number on the notice to pay and tell them you have submitted an appeal and therefore recovery should be suspended.

Send another appeal letter to:

Appeals team
Tax Credits Office
Preston
PR1 4AT

Make sure you clearly state the date on the award notice you wish to appeal and explain why you are filing a late appeal (i.e. you phoned, the sent a letter all of which has gone unanswered).

I don't often defend HMRC, but in this case, they do explain clearly on the renewal form what figure you need to enter. If you look at the renewal form notes http://www.hmrc.gov.uk/forms/tc603rd-notes.pdf on page 9 it tells you to enter your profit (not gross receipts) and also tells you which page of your tax return to take the figure from. This won't make any difference to the appeal if the figure is wrong.

IQ

kevmcfad

Thanks for the advice IQ. I'll do this tomorrow.

Box 2.4 of the renewal form clearly asks for "Income from Self employment". Normally "income" means gross income unless it states differently. I can see that the notes specifies "profits" which I know means net income but surely this should be on the form rather than "income from self employment". It asks for my wife's "Earnings as an employee" which I know is gross income but in my opinion the the wording on the renewal form must be made much clearer to avoid any confusion. It seems I've been telling them my gross income for the past few years, hence the "overpayment" from 2 years ago.

I wish I could just wipe the slate clean and start again from year 2013/14.

Icequeen99

The earnings as an employee is after various expenses have been deducted as well, so neither are gross in the truest sense of the word. That is why it is important to read the notes.

The appeal should sort out this year, but unlikely you will be able to do anything about the other years.

IQ

kevmcfad

Just called HMRC. They've confirmed that they're received and acknowledge my appeal when I sent my letter at the start of the month and that I'd receive "something" in due course.

I'll write a letter to them today acknowledging our telephone conversation and also attach the original appeal letter with it.

Also asked about my wife's employment. The guy confirmed that "Earnings from Employment" means GROSS pay.

Icequeen99

kevmcfad wrote: »

Just called HMRC. They've confirmed that they're received and acknowledge my appeal when I sent my letter at the start of the month and that I'd receive "something" in due course.

I'll write a letter to them today acknowledging our telephone conversation and also attach the original appeal letter with it.

Also asked about my wife's employment. The guy confirmed that "Earnings from Employment" means GROSS pay.

That's good. Appeals can take several months, so don't worry if you don't hear for a while.

And re the earnings for employment. It is Gross pay, before tax and NI are deducted but you have to deduct certain expenses as well as per the notes. So just sticking gross pay in the box might not be right depending on your situation.

IQ