HMRC charge on a house?

epskie

Hello All

My friend is very worried. She owes Tax Credits a lot of money due to an overpayment and she has received a letter advising that they are going to put a charge on her house. Does anybody know if they can do this?

Many Thanks

rogerblack

Yes.
HMRC have broad, and wide ranging powers.
They are very much not ordinary creditors.

Horseunderwater

Yes they can - it is called a Lien and if and when the house gets sold, that lien has to be paid to the HMRC as a secured creditor. If it is really high, they can in fact force the sale of the property concerned, but that is rare.

epskie

Thanks for the replies. If she makes a payment arrangement with them will they stop proceedings? Will they take into consideration the fact that she has very little disposable income?

sammyjammy

Has she already offered to repay the overpayment? How much does she reasonably have available and how much is the overpayment for?

FBaby

'little diposable income' doesn't mean anything. Anyone can have very little disposable income depending on what they spend their money on. What she might consider essential might be seen as a luxury by the HMRC.

What they might agree at this stage will very much depends on the history, the total amount, whether she has ignored any request for payment in the past, how long the debt goes back to, whether she is entitled to any more tax credits (she they can deduct from these payments) etc...

epskie

sammyjammy wrote: »

Has she already offered to repay the overpayment? How much does she reasonably have available and how much is the overpayment for?

Yes she has. Well I don't know for sure but from what she has said I think it's upwards of £12000 :eek:

FBaby - (sorry I don't know how to do 2 quotes in one post ) She has asked them to take it off an existing claim but they said they won't do that. Because of this she has decided against claiming at all now as she is frightened that this happens again.

I don't know her 'disposable income' but she does drive a car. I am so shocked that they can put a charge on a house!

System

epskie wrote: »

Because of this she has decided against claiming at all now as she is frightened that this happens again.

Please tell her not to do that, she will decrease her income even more. If she continues to claim then she has money coming in to help make any repayments to the Tax Credit Office. She just needs to make sure she tells them of any change of circumstance as soon as possible to try to avoid any further overpayments.
If they are receptive now (given the lien) she would have to negotiate terms directly with them.

By the sounds of it the overpayment relates to a previous claim hence why they can't recover it directly from the current claim.

FBaby

That's a big overpayment. How did it come to this? How far ago did it occur and over how long?

She has asked them to take it off an existing claim but they said they won't do that. Because of this she has decided against claiming at all now as she is frightened that this happens again.

That doesn't make sense. Firstly it is odd that would have refused to take some off from an existing claim as this is quite standard pratice, but even if they indeed refused and she is entitled to tax credits, wouldn't she be better off claiming, and either offering the equal repayment (at least) or if refused to put that money aside and build it to offer as part lump sum?

I am wondering if the threat of the charge on the house has actually come from her decision to stop the claiming. I don't understand that rationale behind this decision as I don't get what she had to lose from claiming if she is indeed entitled to something.

justlooking2012

I fail to see how someone can allow themselves to be overpaid upwards of 12k and not realise something is wrong

Caz3121

FBaby wrote: »

That doesn't make sense. Firstly it is odd that would have refused to take some off from an existing claim as this is quite standard pratice,

I think if the overpayment was on a single claim and is now a joint claim or vice versa then they won't take it off the current claim