Tax Credit Advice

Deant

This may be a bit long winded. please bare with me.

Ive been getting tax credits for a few years now. I work in a bar and get minimum wage and it really helps out.

Every year i just give them the figure on my p60 and my credits have always gone up and down, as my hours in the bar sometimes go up and down.

But last year it would seem I've messed it up big time. As the pub i worked it was struggling I lost a shift but I spoke to my manager specificly and said that i could not afford to go below 16 hours as i would lose my tax credit.. So they helped me out and i kept the tax credit...

until this year when i did my annual reclaim thing they got back in touch and asked for a bunch of extra information such as payslips and a confirmation of my hours from my manager and my p60... i sent them all in...

turns out the minimun is not 16 hours.. it is 30 HOURS.... So my tax credit was stopped.

i called in and they said it was because i had told them my hours had reduced so my tex credit was stopped. (there was no mention of overpayment or me owing anything back, by the way)

I mentioned that as of about a two weeks after sending them the information they requested, someone left at work and my hours are now back up to 30 hours. They advised me to reclaim and said they would send me a new claim form... and i should be fine, but expect them to ask for some extra information again such as payslips and stuff because of the recent mix up. i said fine...

a week or so later i got two letters...

they were not claim forms.. it was information about my stopped tax credit. i was told that in 2011 I was over payed about £500 but they are not collecting it at this time..

The second letter says from 2011-12 I was over payed about £1100 and that that i owe them this figure but there was no information about paying it back.

i looked online and read that when there has been an overpayment it will say so and give details on repayment and if they dont hear back you will be sent a letter asking for immediate payment.

I have not had any information about repayment for them. Am i missing something here? Do I owe this money back? Don't get me wrong... If I have been overpayed and they say I need to replay, It will be a struggle,but I will pay what is owed... but I don't exactly want to go chasing them for ways to pay if back if they are not asking for it..

Does that make sense?

Which brings me to my second point/question (told you this was long winded)

a week or so later i received the new claim forms and i set about filling them in... I got to the point where it asked for my income details and it asked for my earnings for 2011-12. now it was this very figure that i sent last time that triggered the overpayment.

2011-12 I was barely doing 16 hours... so my earnings are much less than what i will get this year not i am back to 30...

So I called up and told them this and the guy said they need that figure and that to just put down what was on my p60.. ia specificlay told him the situation and my worry and he said just fill it in and it will be sorted when I get my next p60 and update their records...

So i sent it off, expecting to get a letter asking to get a letter asking for recent payslips/letter from manager proving im back up to 30 hours... But I got nothing...

So cut to today and I get my first new payment. it looks like they have just gone right to paying my a tax credit based on the figure i gave on my most recent p60.. and just as i thought.. it looks like I am getting overpaid.. AGAIN.

They are paying me based on a yearly income at 16 hours a week not the 30 hours a week I have been working since at least april this year...

So i rang them up again today... apparently the system is down so they cant acces my specific details but the lady asked me what the problem was and she said this is normal and that as long as Im not going over £10,000 in the year im fine. just make sure i send in the figure on my next p60..

So this is where i am now. Looks like Im going to get another six months of overpayment...

Does any of this make sense to you guys? is this how it works? as i said, ive had a tax credit for a good few years now and have never had to deal with them other than filling in the reclaim form every year.

Is this just how it works? Do i owe them money? Do I have to chase them to tell me how to pay it back if I do? Am i being overpayed again? Am i safe spending this money? (god knows i need it.. ha!) or do i have to continue to chase them up on lowering it?

Im sorry if this is all a bit stream of thought and rambling. i'm just unsure as what to do next.

davehughes182

Ok. So what you need to do is ring them when the systems are back up on monday and provide a new estimate for current yesr income. This wll then readjust your tax credits and base them on current year earning rather than revious year which if it is based on, you will be overpaid seeing as you will earn close to double your previous year figure. HTH

Pedent

Deant wrote: »

So cut to today and I get my first new payment. it looks like they have just gone right to paying my a tax credit based on the figure i gave on my most recent p60.. and just as i thought.. it looks like I am getting overpaid.. AGAIN.

They are paying me based on a yearly income at 16 hours a week not the 30 hours a week I have been working since at least april this year...

So i rang them up again today... apparently the system is down so they cant acces my specific details but the lady asked me what the problem was and she said this is normal and that as long as Im not going over £10,000 in the year im fine. just make sure i send in the figure on my next p60..

So this is where i am now. Looks like Im going to get another six months of overpayment...

Does any of this make sense to you guys? is this how it works?

Yes, this is how it works. If your income goes up, then the first £10,000 of extra income is disregarded in the first year. See http://www.revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/understanding-the-disregard/#Income rises.

Assuming that your income stays the same, you'll see your award fall next year, when your increased income is taken into account. If your income rose mid-year (meaning your annual income increases in two consecutive years), then it will take two years before your award reflects your current income.

Deant

So I don't need to call them then? I'm cool just taking the overpayment?

I'm not gonna lie. It will come in handy...

Pedent

Just to be clear, I was answering your second question, not your first.

On your first question, if you were previously overpaid, then I'd expect them to ask you to make a repayment, or at least adjust your current payments to recover the overpayment over time. If they haven't done that, then I'm surprised. Personally, rather than hoping that if it's a mistake then they won't notice, I'd query it.

On your second question, check your award letter carefully to make sure that all of the information there is correct. If there are errors, and you don't report them, then you'll be in a much weaker position if you are being overpaid. The disregards system explains why even if all of the information is correct you might get more than you were expecting (and the reference to £10,000 by the person you spoke to supports that). Just try not to get too used to the extra money, because the additional income will only be disregarded in the first year.