Tax credits problem- work not been declared

swingaloo

I have a neighbour who is now in a difficult situation through not declaring a change of circumstances with his working tax credits. (Yes it is his own fault!)

He has a joint claim for him and his partner, however his partner started working 8 months ago and they did not notify them about the change of circumstances.

Of course now the tax credits are due for renewal and he needs to tell them about the change but is quite rightly worried to death.

Any idea what will be the outcome when the muppet declares that she has been working 8 months.

Adereterial

His claim will be investigated, and he will have to repay any overpayment.

He may also have to pay a Civil Penalty charge. He may also be prosecuted for fraud.

AnxiousMum

In all reality, there will be an overpayment that will have to be paid. Now with Real Time Payments - alot of people should be getting caught out before it goes on for too long though.

flutterby_lil

AnxiousMum wrote: »

In all reality, there will be an overpayment that will have to be paid. Now with Real Time Payments - alot of people should be getting caught out before it goes on for too long though.

What is real time payments?

AnxiousMum

Real time payments - any employer now has to report earnings etc. as they are paid to an employee - so the HMRC doesn't have to wait till P60's are issued to have income details of everybody - they get them every pay day now! (or...so I believe!)

zagfles

For a start they've done nothing wrong, so should stop panicing. Starting work is not something which you must tell them about. There definitely won't be a fine. There are some things you must tell them about, and other that you "should", but don't have to. See http://www.hmrc.gov.uk/manuals/tctmanual/TCTM05000.htm

Worst that'll happen is there'll be an overpayment, and even that might not happen since there's a £10k disregard for income increases last year. They could have lost out on some WTC elements eg if they went over 30 hours with the new job.

So they should just do the renewal, declare their income, tell them about the new job, their tax credits this year will probably go down and there might be an overpayment fromlast. But much less to worry about than they thought.