HMRC Child Tax Credit Overpayment Query

CheekyCherub

Hi

I have received a letter from HMRC Tax Credits this morning claiming I was overpaid by £3821.45 in financial year 2005/2006.

I have been in receipt of tax credits since 2005 and this is the first time they have mentioned it. I was living as a single parent in 2005 until I met my current partner in 2010. We have lived together since 2011 and have recently had a little boy, so we have updated them with our new addition and any other changes in our circumstances which may affect the payment of tax credits.

Every year I update them with my financial information as required but this is the first time in 8 years this has been brought to my attention? I have no proof or documentation from them, just a random figure on a letter asking for payment.

I am currently at home looking after the children while my partner works full time. He supports the family and we are not in receipt of any other benefits as they say he earns too much. We have spoken to the Tax Credits dept. several times by phone to discuss our payments and they pay us monthly, not a lot but it's better than nothing. They made me aware of an overpayment of £75 which was accrued in the financial year 2012/2013 as my partner's work is commission based so it was impossible for us to give accurate figures at the time they asked for them. They addressed the £75 overpayment for last year by reducing the current award by a few pounds per month to even it out.

As I don't work my partner deals with all of our outgoings/bills etc and I don't personally have any income. I am definitely not in a position to pay back that amount of money in one go and even looking at a £50 a month payment plan makes me cringe because we are little scraping by each month. I'm worried that they'll start hassling my partner for this money even though the o/p was accrued 5 years prior to us meeting so is not his debt - I'm just not sure what to do. All I know is that at the time I was a single parent who was caring for a newborn, in receipt of income support & child tax credit so I'm unsure how I was overpaid as I had no income whatsoever that year. The only income I received after that was in Nov 2006 when I started work which the HMRC knew about as they amended my payments accordingly.

Seems odd to me why it has take them 8 years to bring this up after me being in touch with them every single year since then and only one of my previous awards (2012/13) shows an overpayment. I'd like some proof of this and some calculations to show how they have worked this out because I'm not going to pay them based on this letter it's very vague. Also, if this is the case why are they still paying me for this financial year? Confused!

Any advice would be gratefully received. I have seen other posts similar to this but they're quite old and a lot has changed with the benefit system since then so I wanted to make sure the info I received was up to date. Thanks.

Jobseeeker

why don't you phone them and find out the reason they believe theres an overpayment?

could it be a mistake? do they wrongly believe you had a partner at that time or something like that.

if its not a mistake I think you will just have to pay it

mel77

You can ask them for a detailed explanation of how the overpayment occurred. If you disagree that there has been an overpayment then you should be able to appeal this but you'll need to be quick - you only normally get a month from the date of their letter - the letter should tell you what to do if you disagree.

If the overpayment was a result of an "official error" (ie their mistake not yours) and you couldn't reasonably have been expected to know you were being overpaid then you shouldn't have to repay it.

Might be worth contacting a local CAB / law centre to see if they can offer any advice / assistance.

Hope that helps.

zagfles

Have you still got you final award notice for 2005/06? What does that say (post all the details except personal ones obviously). When in the year was your baby born?

If you were on IS the whole year don't really see how you ended up with an overpayment, unless you incorrectly getting WTC or wrong number of children or something?

CheekyCherub

Thanks for the replies so far.

I spoke to the HMRC Debt Management team who sent the letter out claiming I owe the money and they were only really interested in recovering the money, ending each sentence with 'so are you calling to make a payment today or are we setting up a repayment plan'? Useful.

I finally broke the advisor away from his script and told him that I have no knowledge of the OP and would like a full statement of the period they claim I owe from. I said that if it shows that an OP was made for the amount I will happily pay it but I require proof and calculations how they came to this figure. He really wasn't interested. He basically advised me they're just debt recovery under the HMRC umbrella but are not the same people as the Tax Credit Office etc. so he asked me to call them and they'll let me know how the OP was calculated. Before he went though he made sure I knew that if this wasn't sorted and I didn't call back today after speaking to the Tax Credit Helpline people to pay or arrange a payment plan, it'll be going to a debt collector next week.

So, I called the Tax Credit Helpline and after being on hold for 25 minutes, I got through.

The advisor for the Tax Credit Helpline - Overpayments Dept. took all my details and told me to basically read the letter out to her with dates, amounts etc as they have no record of this OP on their system. She apologised for not having any information for me and said the only thing that shows is the OP I mentioned in my first post which was resolved by subsequently reducing any future payments until it was fully recovered. I asked her if it was because it was 2005 and she said no she has a full archive of info. going back to then but no OP is showing. She kept me on hold for ages to go through all the info. and was as confused as I was.

I told her that I'd had the phone call with debt management for HMRC and they had threatened this was going to debt collection next week if a payment plan wasn't set up today. She told me that the best thing we could do was complete a dispute form and send that directly to the Tax Office for further investigation as to why I've received this letter despite nothing showing on the TC helpline systems. She said then the recovery of debt should be suspended until the investigation has been completed - which makes sense.

SO ---- another long hold time and another phone call to the debt management team - a female advisor who gives her name as Ahktar (?) advises me that despite the info I'd just given her they are still recovering the debt whether or not I am disputing the claim and despite the fact I have been on the phone with the tax credit helpline trying to get to the bottom of it. It's still being sent to debt collection (via a third party debt collection company) next week if the OP isn't recovered today.

I told her to contact the Tax Credit people so they can together work this out because I'm in the middle being told by one party they have no record of an overpayment that another party is threatening to take further action to claim back. It seems unfair to me why I am chasing both sides despite the woman in debt management claiming they 'work closely' with HMRC tax credits...so why don't they just call them then?!

So I call the Tax Credit office again to tell them they need to contact Debt Management directly to put a hold on any further action until a full investigation has been completed. When I got through I was told that 2 mins before I called their 'systems went down' and to call back on Monday or Tuesday.

There isn't a word for how I feel about all this but the adv. I first spoke to at the tax credit helpline told me she had the info that I wasn't working and in receipt of IS for that period with 1 child so the info they had was correct so she was stumped as to what's gone on.

It continues. I'll let you know how I get on next week when I finally get through to the both parties again. God help my phone bill.

Icequeen99

CheekyCherub wrote: »

Thanks for the replies so far.

I spoke to the HMRC Debt Management team who sent the letter out claiming I owe the money and they were only really interested in recovering the money, ending each sentence with 'so are you calling to make a payment today or are we setting up a repayment plan'? Useful.

I finally broke the advisor away from his script and told him that I have no knowledge of the OP and would like a full statement of the period they claim I owe from. I said that if it shows that an OP was made for the amount I will happily pay it but I require proof and calculations how they came to this figure. He really wasn't interested. He basically advised me they're just debt recovery under the HMRC umbrella but are not the same people as the Tax Credit Office etc. so he asked me to call them and they'll let me know how the OP was calculated. Before he went though he made sure I knew that if this wasn't sorted and I didn't call back today after speaking to the Tax Credit Helpline people to pay or arrange a payment plan, it'll be going to a debt collector next week.

So, I called the Tax Credit Helpline and after being on hold for 25 minutes, I got through.

The advisor for the Tax Credit Helpline - Overpayments Dept. took all my details and told me to basically read the letter out to her with dates, amounts etc as they have no record of this OP on their system. She apologised for not having any information for me and said the only thing that shows is the OP I mentioned in my first post which was resolved by subsequently reducing any future payments until it was fully recovered. I asked her if it was because it was 2005 and she said no she has a full archive of info. going back to then but no OP is showing. She kept me on hold for ages to go through all the info. and was as confused as I was.

I told her that I'd had the phone call with debt management for HMRC and they had threatened this was going to debt collection next week if a payment plan wasn't set up today. She told me that the best thing we could do was complete a dispute form and send that directly to the Tax Office for further investigation as to why I've received this letter despite nothing showing on the TC helpline systems. She said then the recovery of debt should be suspended until the investigation has been completed - which makes sense.

SO ---- another long hold time and another phone call to the debt management team - a female advisor who gives her name as Ahktar (?) advises me that despite the info I'd just given her they are still recovering the debt whether or not I am disputing the claim and despite the fact I have been on the phone with the tax credit helpline trying to get to the bottom of it. It's still being sent to debt collection (via a third party debt collection company) next week if the OP isn't recovered today.

I told her to contact the Tax Credit people so they can together work this out because I'm in the middle being told by one party they have no record of an overpayment that another party is threatening to take further action to claim back. It seems unfair to me why I am chasing both sides despite the woman in debt management claiming they 'work closely' with HMRC tax credits...so why don't they just call them then?!

So I call the Tax Credit office again to tell them they need to contact Debt Management directly to put a hold on any further action until a full investigation has been completed. When I got through I was told that 2 mins before I called their 'systems went down' and to call back on Monday or Tuesday.

There isn't a word for how I feel about all this but the adv. I first spoke to at the tax credit helpline told me she had the info that I wasn't working and in receipt of IS for that period with 1 child so the info they had was correct so she was stumped as to what's gone on.

It continues. I'll let you know how I get on next week when I finally get through to the both parties again. God help my phone bill.

The easiest way to deal with this is to set up a repayment arrangement for a small amount and then sort it out with TCO.

TCO and DMB will not speak to each other.

If you dispute the overpayment, TCO will suspend recovery and that will be passed to the DMB system but until they receive the dispute form that won't happen.

I deal with tax credit cases on a daily basis and I always advise people to make an arrangement to avoid the further action otherwise it can get messy.

If they find in your favour, you will get the money back.

IQ

Jobseeeker

is this debt collection company definitely legit? did HMRC confirm that is the one they use.

I mean, letter received yesterday, first you've heard of it and deadline to pay is today?!

Icequeen99

Jobseeeker wrote: »

is this debt collection company definitely legit? did HMRC confirm that is the one they use.

I mean, letter received yesterday, first you've heard of it and deadline to pay is today?!

HMRC do use debt collection agencies for tax credits and the OP has said she has spoken to DMB at HMRC who have confirmed the debt.

This won't be the first notification of the debt. It would have been on the final 2005/06 notice and the notices up until the single claim ended. Lots of people don't realise as it is buried in lots of figures.

IQ

CheekyCherub

Hi IceQueen thanks for the reply.

When I contacted the Tax Credits people they claim no knowledge of this alleged overpayment so why would I set up a repayment plan with a debt management company? Secondly, I have had no prior notice about this alleged overpayment as the Tax Credit helpline advisor confirmed to me today that there is nothing on the system - only the OP I previously mentioned which was settled in the following award by reducing my monthly payments. The OP at the time was £75 so nowhere near the amount this debt management company are talking about.

I fail to see how setting up a repayment plan for an overpayment that the Tax Credit people themselves say have no record of will be of any help to me? I have been advised by the Tax Credit Helpline to complete a dispute form and have it investigated further by the main Tax office as they are confused as to where this has come from. The lady also confirmed that no correspondence prior to this letter has been sent out as they were unaware of any overpayment due. They have also been paying me continuously and in touch with me continuously since 2005 to date and this has never been mentioned.

My main problem now is that despite all this, the Debt people are still going ahead and sending this to debt collection outside of the HMRC for recovery and I've been advised that this dispute form can take weeks to get sorted which isn't great for me as they told me it's going for further recovery action next week. The letter is dated 1st May but I only received it yesterday which has already put me 10 days behind. I have no idea when they actually posted it.

I'm quite annoyed with the whole thing because when the tax credit people themselves have no idea why I'm being chased for money it's not great especially as none of these companies speak to each other. They're clearly quick enough to speak to each other when they want money recovering though, although they seem to have no knowledge of doing so. It's very confusing. I'll update as I speak to them further on Monday morning. It's already taken up most of my weekend and a whole lot of my phone bill.

Icequeen99

CheekyCherub wrote: »

Hi IceQueen thanks for the reply.

When I contacted the Tax Credits people they claim no knowledge of this alleged overpayment so why would I set up a repayment plan with a debt management company? Secondly, I have had no prior notice about this alleged overpayment as the Tax Credit helpline advisor confirmed to me today that there is nothing on the system - only the OP I previously mentioned which was settled in the following award by reducing my monthly payments. The OP at the time was £75 so nowhere near the amount this debt management company are talking about.

I fail to see how setting up a repayment plan for an overpayment that the Tax Credit people themselves say have no record of will be of any help to me? I have been advised by the Tax Credit Helpline to complete a dispute form and have it investigated further by the main Tax office as they are confused as to where this has come from. The lady also confirmed that no correspondence prior to this letter has been sent out as they were unaware of any overpayment due. They have also been paying me continuously and in touch with me continuously since 2005 to date and this has never been mentioned.

My main problem now is that despite all this, the Debt people are still going ahead and sending this to debt collection outside of the HMRC for recovery and I've been advised that this dispute form can take weeks to get sorted which isn't great for me as they told me it's going for further recovery action next week. The letter is dated 1st May but I only received it yesterday which has already put me 10 days behind. I have no idea when they actually posted it.

I'm quite annoyed with the whole thing because when the tax credit people themselves have no idea why I'm being chased for money it's not great especially as none of these companies speak to each other. They're clearly quick enough to speak to each other when they want money recovering though, although they seem to have no knowledge of doing so. It's very confusing. I'll update as I speak to them further on Monday morning. It's already taken up most of my weekend and a whole lot of my phone bill.

I understand that you are annoyed. What I was suggesting was the way to get things under control in the short term. Of course it doesn't make sense, of course you don't want to pay.

At this point, the debt is still with one part of HMRC - Debt Management and Banking. So you wouldn't be setting it up with a debt management company, it would be with HMRC themselves. If the debt is passed to a Debt Collection Agency or if DMB decide to take a different recovery action (county court, distraint of goods etc.....) then that can be damaging for your credit history.

What I was suggesting was the easiest way to stop things in the short term. As I say I have been dealing with tax credits cases every day since 2003 and sometimes the easiest way to sort things is not always the one that is fairest.

You ask how it will be of benefit to you - well it will stop the debt side of HMRC pursuing things which for most people is important. If that isn't an issue for you, then go ahead and dispute and fingers crossed TCO will do what they are supposed to do and suspend recovery of the overpayment.

Just to be clear though, you talk about these 'companies' not talking to each other. It isn't different companies - it is one Government department HMRC which has different sections. TCO and DMB are two parts of HMRC. DMB sometimes use third party debt collection agencies to recover debts for them.

To be honest I'm not sure what you're asking because you are saying you don't want to make a payment arrangement but then you say that the main problem is DMB are going ahead with further recovery action next week and the dispute could take a few weeks. The only solution to this is to agree a repayment plan until you sort it out with TCO.



IQ

CheekyCherub

When I spoke to DMB they said they're nothing to do with the Tax Credits people their purpose is to collect any monies owed to HMRC. Anyway, that aside I understand what you're saying, setting up a repayment plan is buying me some time for them to sort it out without it being passed to debt collection outside of the HMRC but for that amount of money they say I owe the minimum payment is going to be stupidly high and I can imagine trying to claim any of it back if I am proven to not owe anything will be a painful task. Why the TC people can't just talk to DMB is beyond me it would clear this up much quicker. It's very unprofessional expecting me to be their go-between. I'm going to call them both again tomorrow morning and hopefully I'll make some progress. Thanks for your advice it is appreciated. I'll let you know how it all goes.