tax credit overpayment help: told to ask bank for a loan?

newbyteacher

Hi, i had to reduce my hours at work due to the afterschool club i was using closed and i had no one to take/collect kids from school.
Anyway I informed TC and told them the change in circumstances straight way. The TCs i was receiving stopped immediately.
I have received a letter saying I been overpaid. I have just contacted the Debt dept to set up a payment plan. The first question I was asked was Have I approached my bank for a loan to pay this off? I was shocked to be honest as I think this is wrong, I questioned the lady if this was standard procedure and she said yes. I have already taken a £300 a month pay cut to reduce my working hours so am not really in a position to get a loan. Has anyone else come across this? Am i being naive? Is this acceptable practice?:mad

Icequeen99

newbyteacher wrote: »

Hi, i had to reduce my hours at work due to the afterschool club i was using closed and i had no one to take/collect kids from school.
Anyway I informed TC and told them the change in circumstances straight way. The TCs i was receiving stopped immediately.
I have received a letter saying I been overpaid. I have just contacted the Debt dept to set up a payment plan. The first question I was asked was Have I approached my bank for a loan to pay this off? I was shocked to be honest as I think this is wrong, I questioned the lady if this was standard procedure and she said yes. I have already taken a £300 a month pay cut to reduce my working hours so am not really in a position to get a loan. Has anyone else come across this? Am i being naive? Is this acceptable practice?:mad

This is absolutely wrong and not in line with standard practice at all.

Have a look at their published guidance here http://www.hmrc.gov.uk/leaflets/how-hmrc-handle-txcr-opay.pdf

This is how you should be negotiating to to pay this back.

Ring back and speak to someone else.

IQ

newbyteacher

thanks for replying. I told her out right I would not even consider this option, and asked for her name as well. I have set up a DD I want to pay it off.
I too have checked the guidance and I am in the process of writing a complaint about the issue I encountered. I work for a Government Dept and consider myself to be savvy about things, what if someone vulnerable rang up and was given this advice? I am so annoyed but more so am embarrassed that this is the sort of so called help we as a public service organisation are giving. Rant over sorry

SuziQ

Are you sure you were overpaid? If you told them straight away and they stopped your CtC then why the overpayment?

newbyteacher

hi, no i am not sure about the overpayment i have requested their calculations but have set this up in the meantime to keep them off my back. The overpayment happened as my wages have fluctuated as i have changed my hours a couple of times in the past 12 months. I have also just sent of my renewal and am pretty sure I underestimated my earnings, but will have to wait and see.

Johnny.99

It's wrong that the first question you were asked was whether or not you had tried to get a loan from the bank, but it is one of the suggested methods of finding the money to make a repayment - along with using savings, or borrowing from a family member.

Icequeen99

Johnny.99 wrote: »

It's wrong that the first question you were asked was whether or not you had tried to get a loan from the bank, but it is one of the suggested methods of finding the money to make a repayment - along with using savings, or borrowing from a family member.

Is that in internal guidance or is it published anywhere? HMRC have a very clear published guidance for tax credits none of which includes asking people to take out loans.

IQ

Johnny.99

Icequeen99 wrote: »

Is that in internal guidance or is it published anywhere? HMRC have a very clear published guidance for tax credits none of which includes asking people to take out loans.

IQ

It's in the Tax Credits Negotiating Framework in the DMB Manual. That makes mention of approaching the bank, along with the other two options I mentioned.

It's not something I would ever ask, though. And I rarely hear anyone else suggesting a bank loan. I don't see the point in having someone borrow money they will have to pay interest on in order to pay back a debt which isn't accruing interest. Most will simply ask if the person has access to any other source of income, rather than being specific.

As with most helplines, it depends entirely on the advisor you end up speaking to. Some are more zealous than others in following a script and emphasizing the threat of legal action.

spiritus

Icequeen99 wrote: »

This is absolutely wrong and not in line with standard practice at all.

Have a look at their published guidance here http://www.hmrc.gov.uk/leaflets/how-hmrc-handle-txcr-opay.pdf

This is how you should be negotiating to to pay this back.

Ring back and speak to someone else.

IQ

I am in the same boat.


That link has been temporarily taken down so I am fumbling in the dark for a solution


I can't even contact HMRC as they seem to be constantly busy and don't give you the option to hold.

spiritus

blondebubbles wrote: »

There is some good info here - http://www.revenuebenefits.org.uk/tax-credits/guidance/how-to-deal-with-hmrc/dealing-with-debt/#Direct%20Recovery

thankyou but the link on Step 1 has been taken down