Tax Credits overpayment.

dori2o

This is going to come as a shock to some.

My brother has a tax credit overpayment, which is actually correct. He earned well over the limit but did not tell them. He thought he'd get away with it. Silly Boy.

Anyway, he's just done his self assessment for his self employment and he's due a £1700 refund, the overpayment of TC is £3500.

I'm sure I have read somewhere that someone offered the tax crediots people an amount in full and final settlement of the arrears, i.e. as you may do with a bank etc when trying to clear your debts. He wants to do this and give up his refund just to clear the balance.

Does anyone have any experience of this?

GemA_2

Sounds like you're talking about composite offers.

For Tax Credits, if he accepts that it's due (and it sounds like there's no question of that), then he has to pay it back as quickly as he can. To be fair to all the people whose tax affairs are in order, he can't sit on the money.

The only time HMRC would consider accepting part-payment in full and final settlement is when there is no prospect of the debt ever being repaid in full. He would have to write in, with his offer, and explain that he has no assets, that he is unable to work ever again because of ill health or whatever, and he would have to complete a full income & expenditure form showing his very difficult financial position. They would ask some very searching questions.

I don't know the exact criteria for this kind of thing being agreed, because every case goes off to a separate office for consideration, but I do know I haven't seen very many accepted! And the ones that have been accepted really are exceptional circumstances, and they tend to be unlucky people who sound like they have far more problems than just Tax Credit overpayments.

Oh, and if I were him, I'd put that refund straight towards the debt.

kelloggs36

In the case of benefits etc there is no option of paying back less than what is owed.