How long can tax credits go back and ask for cash?

spike2012

Hello

How far can tax credits go back for claiming an "overpayment"

When my (now wife) was in hospital for a long period, she ended up going bankrupt in 2008 over unpaid debts and payday type loans. The tax credits overpayment HMRC no reference was "included in the pot"

Now, since 2008, my wife and I have met, moved in, got married and had a daughter...

Since the day we moved in together, we have always claimed tax credits properly and kept them up to date with any of our changes such as increase in my earnings etc. (I work full time)

Now when on the phone recently they have asked to speak with my wife (something they have never asked to do before) and all of a sudden they are asking her about £1500 from 2008) She has always had the same National Insurance number, always notified of new info (house move, name change etc) and she has always claimed tax credits from before 2008 until now so I can't see why it is all of a sudden coming to light now?

What's our best approach? I understand if she has to pay this back its "our" debt. Could we agree a repayment plan with them? We don't have £1500 laying around.

She doesn't remember the reason of the over payment (she was claiming benefits at the time) and doesnt have any information in regards to it. (such as old tax credits letters)

Do we contest it? She's trying to contact her support worker now to get information in regards as to dates and who dealt with it at the time. It seems as though the money was included in the bankruptcy, and the info sent to HMRC. A person at Tax credits last week admitted that it seemed as though someone their end hand't filed the forms properly on the system, AND we have a dated letter since saying that "Tax credits overpayments total amount - £781.06" With 31 Jan 2011 on it. The person at Tax credits also said that this letter should have included the £1500 overpayment if it was a case of her/us owing it? As the letter states total amount owed to HMRC at that time was £700 odd, so is that an agreement? I don't know the legality of it all.

This is so confusing and difficult as it relates to before we met, and is from nearly 5 years ago.

TIA
Spike

Dunroamin

This might help.

http://www.insolvencydirect.bis.gov.uk/freedomofinformation/technical/TechnicalManual/Ch73-84/Chapter77/part7/Part7.htm

BigAunty

http://www.hmrc.gov.uk/leaflets/how-hmrc-handle-txcr-opay.pdf

http://www.taxcc.org/TCC_News/05/01/2011/tax-credit-overpayments-and-bankruptcy/

dori2o

spike2012 wrote: »

Hello

How far can tax credits go back for claiming an "overpayment"

When my (now wife) was in hospital for a long period, she ended up going bankrupt in 2008 over unpaid debts and payday type loans. The tax credits overpayment HMRC no reference was "included in the pot"

Now, since 2008, my wife and I have met, moved in, got married and had a daughter...

Since the day we moved in together, we have always claimed tax credits properly and kept them up to date with any of our changes such as increase in my earnings etc. (I work full time)

Now when on the phone recently they have asked to speak with my wife (something they have never asked to do before) and all of a sudden they are asking her about £1500 from 2008) She has always had the same National Insurance number, always notified of new info (house move, name change etc) and she has always claimed tax credits from before 2008 until now so I can't see why it is all of a sudden coming to light now?

What's our best approach? I understand if she has to pay this back its "our" debt. Could we agree a repayment plan with them? We don't have £1500 laying around.

She doesn't remember the reason of the over payment (she was claiming benefits at the time) and doesnt have any information in regards to it. (such as old tax credits letters)

Do we contest it? She's trying to contact her support worker now to get information in regards as to dates and who dealt with it at the time. It seems as though the money was included in the bankruptcy, and the info sent to HMRC. A person at Tax credits last week admitted that it seemed as though someone their end hand't filed the forms properly on the system, AND we have a dated letter since saying that "Tax credits overpayments total amount - £781.06" With 31 Jan 2011 on it. The person at Tax credits also said that this letter should have included the £1500 overpayment if it was a case of her/us owing it? As the letter states total amount owed to HMRC at that time was £700 odd, so is that an agreement? I don't know the legality of it all.

This is so confusing and difficult as it relates to before we met, and is from nearly 5 years ago.

TIA
Spike

First, there is no Statute of Limitations when it comes to money owed to the state. They can go back as far as they want/need to recover money owed.

2nd, this doesn't become a joint debt, neither will it be notified on any joint claim you now have.

The Overpayment has arisen during a 'Single' claim. That claim ended when your wife ended the single claim and started a joint claim.

The 'debt' remains her sole responsibility not yours, and therefore should not be referenced in any joint claim.

The letter you have from Tax Credits stating the overpayment is £700 refers only to the joint claim.

Finally, if this was included in the Bankrupcy order you should have no problem proving this. Speak to the Official Receiver and dig out any and all paperwork your wife has regarding the order. If she has none it may be possible to get copies of the order from the court the proceedings took place at.

miduck

dori2o wrote: »

First, there is no Statute of Limitations when it comes to money owed to the state. They can go back as far as they want/need to recover money owed.

That's wrong. The Limitations Act applies to state owed money in the same way as it does any other debt. I imagine what you mean is that all the Act does is places a bar on legal action after six years, HMRC can still recoup the monies through either voluntary payment or through adjusting tax codes/ deducting from relevant benefits.

dundeediva

I was going to reply but the reply above from dori2o is exactly right.

Check the date the insolvency/bankrupcy went through. If the overpayment happened after the insolvency start date then the debt is repayable. If it happened before it should have been included.

good luck

dd

dori2o

miduck wrote: »

That's wrong. The Limitations Act applies to state owed money in the same way as it does any other debt. I imagine what you mean is that all the Act does is places a bar on legal action after six years, HMRC can still recoup the monies through either voluntary payment or through adjusting tax codes/ deducting from relevant benefits.

It depends on the statutes that govern where the money is from.

For example, someone who commits tax fraud is not protected from legal action to recover the debt even if it is more than 6 years old. The same with tax credits, the same with council tax, etc etc etc.

The only thing that the States departments have to do is produce the calculations that determine these 'debts' within the specified time period.

I have dealt with many people who have self assessments debts going back to 1997 when it started, and have seen many cases proceed to court for recovery.

miduck

dori2o wrote: »

It depends on the statutes that govern where the money is from.

For example, someone who commits tax fraud is not protected from legal action to recover the debt even if it is more than 6 years old. The same with tax credits, the same with council tax, etc etc etc.

The only thing that the States departments have to do is produce the calculations that determine these 'debts' within the specified time period.

I have dealt with many people who have self assessments debts going back to 1997 when it started, and have seen many cases proceed to court for recovery.

We are not talking about criminal liability, are we? Are you suggesting the OP committed fraud, are you privy to information the rest of us are not? :rotfl:

dori2o

miduck wrote: »

We are not talking about criminal liability, are we? Are you suggesting the OP committed fraud, are you privy to information the rest of us are not? :rotfl:

No I'm not, I was simply giving but 1 example.

There is no Statute of Limitations on the collection of overpaid Tax Credits, assuming that the calculation for this overpayment was issued within the Statutory time limits. In normal cases this is 12 months from the 2nd specified renewal date for Tax Credits (31 January following the end of the tax year).

miduck

dori2o wrote: »

No I'm not, I was simply giving but 1 example.

There is no Statute of Limitations on the collection of overpaid Tax Credits, assuming that the calculation for this overpayment was issued within the Statutory time limits. In normal cases this is 12 months from the 2nd specified renewal date for Tax Credits (31 January following the end of the tax year).

Are you suggesting that the Limitations Act does not apply to benefit overpayments, or do you just enjoy digging yourself into a hole?

dori2o

miduck wrote: »

Are you suggesting that the Limitations Act does not apply to benefit overpayments, or do you just enjoy digging yourself into a hole?

As I've already said it does not apply in this instance.