Tax Credit Overpayment

astra948

I hope someone can help with my query…

The child tax credit people removed some of my details from the system and this resulted in an overpayment. They asked for the money back and we put in an appeal as it was their mistake. The appeal was turned down on the basis that it was our responsibility to informthem of their mistake i.e. it would have been obvious (as we are all experts in how the system works) from the confirmation letter that they had made a mistake and we should have phoned them.

The overpayment only came to light when we sent in the end of year return.

It seems like they can just absolve themselves of any responsibility here and put all the blame on us.

So, are they correct in saying that it’s our fault due to us not informing them straight away of their mistake…we didn’t know they’d made a mistake until the end of year confirmation forms went in and they said we needed to pay money back.

Is it their responsibility as, and without our knowledge or agreement, they made then change to the system that caused the error. The change was made when we contacted them regarding a totally different matter.

Or, and what we put them, that there is right and wrong on both sides so we should agree something in the middle i.e. we don’t have to pay it all back.

Cheers

Icequeen99

Have a look at Code of Practice 26 which sets out their recovery policy.

Where there is an error on both sides, they should apportion the overpayment between you and write off the bit that is attributable to their error.

The main issue is whether a new award notice was issued after they made the change to your award. If it was, was the change that they made visible on the award notice?

If it was, then presuming the award was issued straight after the change was made, the whole overpayment will fall to you.

If there was no award notice, then I would argue HMRC should write off the overpayment between the change and the next award notice where it was evident.

If it was not possible to see it on an award notice (i.e. some detail on their system which isn't on the award notice) then again I would argue they should write it off.

More detail would help.

IQ

astra948

They said that two award notices were sent from the time of change to when we sent in the end of year return but we don't remember receiving them. Also, and this probably doesn't help our case, we were new to the child tax process at the time and wouldn't have really understood what they were sending us. We are a bit more knowledgeable now.

Icequeen99

astra948 wrote: »

They said that two award notices were sent from the time of change to when we sent in the end of year return but we don't remember receiving them. Also, and this probably doesn't help our case, we were new to the child tax process at the time and wouldn't have really understood what they were sending us. We are a bit more knowledgeable now.

That will be the difficulty in the case. If both notices showed the error then not much you can do. Even though you were new to the system, the award notices say that you must check the details. That doesn't require knowledge of the system, just knowledge of your own circumstances.

What was the mistake?

IQ

astra948

I was made redundant and that doesn't seem to be a concept that sits easily with them. It took me months and numerous phone calls/letters before they had my correct details on the system. Every time I told them something they just said - I haven't got a box for that. Anyway, part way through the year we phoned up about something totally unrelated and I can remember the girls words now - you account doesn't look right (which it was because it had taken months to sort out) so I need to remove that information. At the time we didn't think to question it, it just seemed like she was thinking aloud. We found out later, and to our cost, that she had just removed all my redundancy payments from the system.

Icequeen99

astra948 wrote: »

I was made redundant and that doesn't seem to be a concept that sits easily with them. It took me months and numerous phone calls/letters before they had my correct details on the system. Every time I told them something they just said - I haven't got a box for that. Anyway, part way through the year we phoned up about something totally unrelated and I can remember the girls words now - you account doesn't look right (which it was because it had taken months to sort out) so I need to remove that information. At the time we didn't think to question it, it just seemed like she was thinking aloud. We found out later, and to our cost, that she had just removed all my redundancy payments from the system.

Even if the fault was with them, the award notice would have shown the lower income and presumably your payments would have gone up.

You can try the dispute process, but i suspect you won't get very far.

IQ