Tax credits renewal / overpayment

ElwoodBlues

I'm self employed, and just got my accounts and income figures finalised for last year. So yesterday I called the tax credits phone line (I tried last week, but their computer system was down), to give these figures and get our claim reinstated - our payments stopped in August as we hadn't returned the annual declaration for last year.

I was told that it was too late to renew the existing claim, and that we had to start a fresh one. Not that bad I thought, guess we will loose out on what we would've been paid from August to now, which is what I expected.

However, I was then put through to the overpayments team who are demanding that we repay everything that was paid to use from April to August this year (about £4000). These payments were based on the previous years income - they were working from the estimates that we had made last year, and now corroborated by the exact figures that I've just given them. There is a couple of hundred pounds difference, but that shouldn't make a big difference to the credits that we are entitled to? I assumed that they would only try to recover overpayments that had arisen though a change in circumstances that hadn't been declared in time, as our income has barely changed I thought it wouldn't affect what we'd already been paid.

Is this right that we need to repay this money - it's almost exactly the amount that we should be entitled to? I understand that this is because our annual declaration was done late (due to not having the self employement figures, as explained above). Should I have pushed to have it renewed rather than restarted, or would I be banging my head against a brick wall)? Is it too late to go back and request this now that I agreed (without realising the implications) to starting a new claim?

He mentioned that we could dispute the overpayment or setup a payment plan to repay, but then we got disconnected. Is it worth starting a dispute/appeal and fighting this, or will I be wasting my time? When the new claim gets processed, and weekly payments start, they should be broadly similar to what we were paid previously. Is it possible that they can deduct the previous 'overpayments' from our new claim? It seems a bit silly to be paying us one way, and us paying it straight back as repayments?

Icequeen99

Basically, yes they are right.

Tax credit claims last only for 1 tax year. You need to reclaim every year. Rather than making everyone fill in big claim form, and so there isn't a gap in payments, HMRC operate the renewals process.

The renewal finalises the year just ended (in this case 2011/12) and act as a claim for the 12/13 year.

Until the renewal is done, there is no claim for 12/13. HMRC are just making provisional payments.

If you do not complete your declaration by the deadline, HMRC stop the provisional payments and ask for them back because there is no valid claim for that tax year.

You need to take action quite quickly. First, you need to check the statement of account you received from HMRC telling you your payments have stopped. What is the date on it? Depending on the date on that, you might be able to get the claim reinstated. If you have a good reason for not returning the declaration you might still be able to sort it out.

If not, then they are right, you can make a new claim but that won't help with the overpayment. I have seen dozens of people dispute those overpayments but it is never successful.

Was there a reason why you didn't do the declaration/renewal forms? EDITED to add -i see you say it was because of your figures - but the instructions say that if you don't know your income then you must provide an estimate and confirm actual income by 31 Jan 13.

IQ

ElwoodBlues

The statement of account was dated 13th August. Is that too late to try and reinstate it?

I didn't see much point in contacting them back then only to say that I don't have the figures ready that they were asking for. I guessed that they'd be close to last year (and it turns out that they are), and I didn't see the point in providing another estimate when it would be the same as the estimate they were already using. I knew I'd have the figures before 31st Janurary, as I'd have done my tax return by then, so I thought the tax credits would be fine.

Do I have any chance of getting the claim reinstated now that I've started the ball rolling on a new claim?

Is being self employed and not yet having the figures available a valid reason for not doing the return on time? I imagine the only valid reason to dispute is because they've made a mistake/error, and I don't think they have in our case.

Icequeen99

Technically you have 30 days from the date on the Statement of Account to do your renewal and get it reinstated, but the last couple of years HMRC have extended this. This year it was 62 days from the date on the statement of account.

When did you contact them about this? If that was within the 62 day time limit then they should have reinstated it if you were able to give your estimated figures.

You might need to get some advice on fighting it if the helpline refuse to deal with it. Try Citizens Advice, TaxAid or LITRG

You need to make it very clear to them if your figures are still estimated.

IQ

ElwoodBlues

I first phoned up last Thursday (11th Oct), so just within then 62 days. But they had a recorded message saying that their computer system was down and that they couldn't access any personal information until yesterday (15th Oct), and only give general advice before then. I tried again on Friday and Saturday, just in case they'd got their systems up and running again early, but no such luck.

I've just counted and yesterday was 63 days since the statement date, so last week I would have been within it. I almost posted the form back last Thursday as well, wish I'd done that now!

I might call them again and explain that I was trying to sort it out last week, or would I be better putting things in writing at this stage? Looking at the paperwork, we've also received a Notice To Pay, dated 19/9/12, requesting payment by 29/10/12. I guess I need to deal with this pretty quickly, either to defer it while we appeal/contest it or to try and setup a repayment plan (there's no way we can afford to pay it in one go).

I have final figures now, that is what I was waiting for, didn't see the point in giving them estimates that they already had.

Icequeen99

I understand what you are saying re the estimates, but the rules are you must complete the forms even with an estimate. You'll know for next year at least.

Sorting it out won't be straightforward, things never are with TCO. Problem basically is this isn't a dispute or an appeal. It isn't a dispute because you don't want them to write off the overpayment, you need them to reinstate the claim. It isn't an appeal because there is no appealable decision because there is no claim.

That is why I suggest you get some advice. Your argument is going to be that you made contact on 11th Oct within the 62 days and therefore they should reinstate the claim. You can try ringing the helpline and explaining, they should refer it to a specialist team.

Tell them you want someone to consider 'good cause' for late renewal. Then you will need to say that you contacted them within the 62 days but that because the system was down you could not have it dealt with. See how that argument goes.

Good luck trying to sort it out! In the meantime, speak to DMB about the notice to pay and explain to them what you are doing.

IQ

ElwoodBlues

Oh yes, I definitely won't be making this mistake again. Lesson learned! I will try phoning and pleading with them again.

What is DMB please?

Icequeen99

Sorry, debt management and banking. They are the part of HMRC who deal with debt collection, including tax credits debts.

IQ

ElwoodBlues

Phoned them again today and the renewals team couldn't help, but they put me through to someone from overpayments who understood that I had initially tried to contact them within 60 days, and was well aware of their complete IT system failure last week, and he suggested I should dispute it on this basis. I've filled in the form and explained in detail, so hopefully that will be enough.

benefitbaby

ElwoodBlues wrote: »

I first phoned up last Thursday (11th Oct), so just within then 62 days. But they had a recorded message saying that their computer system was down and that they couldn't access any personal information until yesterday (15th Oct), and only give general advice before then. I tried again on Friday and Saturday, just in case they'd got their systems up and running again early, but no such luck.

I've just counted and yesterday was 63 days since the statement date, so last week I would have been within it. I almost posted the form back last Thursday as well, wish I'd done that now!

I might call them again and explain that I was trying to sort it out last week, or would I be better putting things in writing at this stage? Looking at the paperwork, we've also received a Notice To Pay, dated 19/9/12, requesting payment by 29/10/12. I guess I need to deal with this pretty quickly, either to defer it while we appeal/contest it or to try and setup a repayment plan (there's no way we can afford to pay it in one go).

I have final figures now, that is what I was waiting for, didn't see the point in giving them estimates that they already had.

You need to submit a dispute (TC846 form) and detail your unsuccessful attempts to contact them before the ultimate deadline (within the 62 days). Once a dispute is submitted recovery of the overpayment will be suspended until the dispute outcome is decided. You may want to involve your MP given that it was HMRC problems that preventing you from providing them with the information and this is rather unfair.

benefitbaby

And now you can ignore me as you have already done it!!