Advice pls!!! WTC Overpayment recovery

kerry3280

Hi all, I'm hopping mad!! :mad::mad:

Very, very long story short, I finally won my case against HMRC who should have paid me WTC from Jan to April this year but didn't. I've been going through the process since then and have finally had notification that my award has been backdated.

Yay! You'd think right?? Wrong.

I also have an overpayment from 2011/2012 that I am repaying at 10% a year. You can see where this is going can't you??

Yup. They've offset the whole of the backdated claim i.e. the tax credits they SHOULD have awarded me against this overpayment.

Can they do this?? I'm guessing they can, or they wouldn't, but has anyone come across this? Anyone appealed? What legal basis do they use for doing this?

As you can tell I'm *&*&&*&(

Any help/advice gratefully received thank you!!

midnight_express

Yes they can do it. The legal basis is that you owe them the money.

Icequeen99

kerry3280 wrote: »

Hi all, I'm hopping mad!! :mad::mad:

Very, very long story short, I finally won my case against HMRC who should have paid me WTC from Jan to April this year but didn't. I've been going through the process since then and have finally had notification that my award has been backdated.

Yay! You'd think right?? Wrong.

I also have an overpayment from 2011/2012 that I am repaying at 10% a year. You can see where this is going can't you??

Yup. They've offset the whole of the backdated claim i.e. the tax credits they SHOULD have awarded me against this overpayment.

Can they do this?? I'm guessing they can, or they wouldn't, but has anyone come across this? Anyone appealed? What legal basis do they use for doing this?

As you can tell I'm *&*&&*&(

Any help/advice gratefully received thank you!!

You need to get some advice.

They can only recover so much from an award, but normally where a payment is made later they seem to ignore these percentages.

The legislation sets the percentages (10, 25 and 100%).

However, it isn't straightforward and depends on exactly what has happened.

IQ

kerry3280

midnight_express wrote: »

Yes they can do it. The legal basis is that you owe them the money.

Thank you for your 'helpful' remark. Presumably, using your own logic, if the bank turn up tomorrow morning at your house and demand full settlement of your mortgage you would be ok with that.

They would have a legal basis. After all, you would owe them money.

kerry3280

Icequeen99 wrote: »

You need to get some advice.

They can only recover so much from an award, but normally where a payment is made later they seem to ignore these percentages.

The legislation sets the percentages (10, 25 and 100%).

However, it isn't straightforward and depends on exactly what has happened.

IQ

Thanks IQ. That was my understanding from my research so far, the 10% percentage which they have already recovered for 2012/2013. The only response I can get from HMRC when I pose them the question is that it is done as per their 'guidelines'. I have asked what forms the statutory framework for these specific guidelines and no one seems to be able to give me a response.

Orville

Don't understand what the problem is?. If you owe them money from an over payment, why not pay it off from the award.?

kerry3280

Orville wrote: »

Don't understand what the problem is?. If you owe them money from an over payment, why not pay it off from the award.?

A couple of reasons. The overpayment was their mistake in the first place and I am already repaying it at the rate the law says I should.

Secondly, when they made the mistake initially I had nothing to live on from Jan-April so had to borrow from family and friends to make ends meet and feed my son. The money they have now put towards the overpayment was going to pay them back.

Thirdly, I firmly believe that as this is their mistake, not mine, they should put me back in the position I would have been had they not made the mistake in the first place.

I don't think any of the above is unreasonable?

FBaby

It makes sense that when a repayment schedule is agree when you only repay x amount a week/month, it is because without it, you couldn't make do. You clearly did, so why not pay it all back in one go when you can? If you had to borrow money to make do, then it just mean that in essence the loan is transfer from tax credits to whoever you now owe.

FBaby

Posted at the same time. So you now owe your family. Surely it is better to owe people who you love and love you than a government agency. It might be frustrating but at least you now have more control over repaying the money you owe than you did when you owed tax credits which had got to be better?

Orville

kerry3280 wrote: »

A couple of reasons. The overpayment was their mistake in the first place and I am already repaying it at the rate the law says I should.

Secondly, when they made the mistake initially I had nothing to live on from Jan-April so had to borrow from family and friends to make ends meet and feed my son. The money they have now put towards the overpayment was going to pay them back.

Thirdly, I firmly believe that as this is their mistake, not mine, they should put me back in the position I would have been had they not made the mistake in the first place.

I don't think any of the above is unreasonable?

I still don't see the problem. You were paying at an agreed rate
of 10% back per year. That was based on the fact you had no money. You then came into a lump sum. It stands to reason they would take it back in one hit. As for your borrowed money from your family i am sure as long as its paid back most families wouldnt mind. I know mine wouldn't.

What would you have done if you hadn't won the claim?. How did the overpayment come about anyway?.

Icequeen99

blondebubbles wrote: »

I personally agree that this is the way it should work and I've seen it happen many times but I can understand your frustration if you were expecting money and didn't receive it. I also have trailed through the guidance and can't find it. Now that it has happened I think it will be very difficult to change. You could always complain but I don't know if it will help.

But Reg 12A SI 2002/2173 states very clearly that there are maximum rates at which an overpayment may be recovered from payment of tax credits. So the recovery should not exceed those percentages and anything left should be paid back to the OP.

Whether that is morally correct is a separate issue, but the rules are the rules and HMRC can't just choose to ignore them (of course they do ignore them frequently - but they should be challenged).

IQ