tax credits repayment querey

viczs123

hi folks
hmrc have said they want to claim back my tax credit overpayments through my tax code from april.i dont pay tax in my current job so how will this work?
thanks in advance for any help an advice

Icequeen99

viczs123 wrote: »

hi folks
hmrc have said they want to claim back my tax credit overpayments through my tax code from april.i dont pay tax in my current job so how will this work?
thanks in advance for any help an advice

You will start paying 'tax' because HMRC will have changed your tax code.

IQ

viczs123

i only earn 540.00 per month .i dont earn enough to pay tax.how can they take it from my wages through my tax code when i dont earn enough to pay tax in the first place?

Horseunderwater

They do not know that. How much is the overpayment? I assume that it was perhaps to do with Work tax credits and hours? If that is the case then you need to ask them to deduct it from any tax credits that you now get as there is no other way to pay what you owe. As you have not posted if you are single or a lone parent or disabled we cannot help further at the moment.
If you can tell us how they overpaid you, someone may be able to help you further.

nannytone_2

they will lower your tax code!
at the moment it will be 810, meaning you can earn £8,100 before you pay tax.
if they lower it to for example 610, you would pay tax on all earnings above £6100

zagfles

They could lower the tax code low enough to collect it but it's not a very good way of doing it, because any overtime etc would mean you'd end up paying too much.

It's straightfowards if you earn say between £10-30k, then all they need to do it lower your tax code by half what you owe, eg if you owe £1000 they'll lower your code from 944L to 444L and that will collect the correct amount, unless income increases massively.

In your case they'd have to lower it to 148L (if you owe £1000), and they'd only collect the right amount if your earnings stayed exactly the same.

Knowing HMRC they'll lower your code by half what you owe and end up not collecting anything

viczs123

thanks horseunderwater.
i dont claim tax credits anymore as i dont work enough hours.the overpayment is from previous years. its for a total of 933.00.
hmrc have said its due to an increase in wages at that particular time.however the increase in my wages was well within the level of income increases that they disregarded i.e was only a rise of less than 80.00 per month.
thanks again in advance for your help

Horseunderwater

However next years basic code is 944L - so based on £540 gross a month (£6480/year) they would need to lower the code an awful lot to get the overpayment back via the code. But without knowing how much the overpayment is - no one can advise further.

viczs123

thanks for your response zagfles. i only earn approx 6480 per year what will they do in that instance?

zagfles

viczs123 wrote: »

thanks horseunderwater.
i dont claim tax credits anymore as i dont work enough hours.the overpayment is from previous years. its for a total of 933.00.
hmrc have said its due to an increase in wages at that particular time.however the increase in my wages was well within the level of income increases that they disregarded i.e was only a rise of less than 80.00 per month.
thanks again in advance for your help

Was it an increase over previous year's income or an increase over an estimate? Only increases over previous year's income are disregarded.

Horseunderwater

viczs123 wrote: »

thanks horseunderwater.
i dont claim tax credits anymore as i dont work enough hours.the overpayment is from previous years. its for a total of 933.00.
hmrc have said its due to an increase in wages at that particular time.however the increase in my wages was well within the level of income increases that they disregarded i.e was only a rise of less than 80.00 per month.
thanks again in advance for your help

What year did it pertain to? Because it sounds like they have made an error and I think you need to look up the rules and dispute this more.