Advice pls!!! WTC Overpayment recovery

Orville

Icequeen99 wrote: »

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

What are those rates? If one is 100℅ and the payee's circumstances change can they then collect in full. Presumably it was only set at 10% because at the time that is all the op could afford. Now the ops circumstances have changed, is there nothing to say they can then collect in full?.

Icequeen99

Orville wrote: »

What are those rates? If one is 100℅ and the payee's circumstances change can they then collect in full. Presumably it was only set at 10% because at the time that is all the op could afford. Now the ops circumstances have changed, is there nothing to say they can then collect in full?.

Well yes, obviously it depends on the OP's situation but it didn't sound like she was getting family element only and so would be subject to 100% (that would be an annual award of only £545)

I suppose the point I was making was that it isn't correct to say that HMRC can necessarily just offset the whole backpayment against an older overpayment debt.

kerry3280

I came under the 10% rule then and I still do now. Ice Queen has basically got to the bottom of my issue.

Whether or not people think they should offset it against the overpayment or not as a moral issue has absolutely no bearing on the legal issue which is what I'm am trying to get answers to here.

If the primary legislation states that no more than 10% should be recovered over the year then by doing this they are clearly breaching those rules UNLESS it states differently elsewhere. And I cannot find that it does.

So whether you all agree with it or not under these circumstances ask yourself this. How would you like it if HMRC did something to you that wasn't legal?

Presumably you'd want to enforce your rights.

MissMoneypenny

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?

As you have now settled your debt to HMRC in one go, then why not use the 10% money that you had been paying back to HMRC, to pay back the money you owe to your family?

Icequeen99

kerry3280 wrote: »

I came under the 10% rule then and I still do now. Ice Queen has basically got to the bottom of my issue.

Whether or not people think they should offset it against the overpayment or not as a moral issue has absolutely no bearing on the legal issue which is what I'm am trying to get answers to here.

If the primary legislation states that no more than 10% should be recovered over the year then by doing this they are clearly breaching those rules UNLESS it states differently elsewhere. And I cannot find that it does.

So whether you all agree with it or not under these circumstances ask yourself this. How would you like it if HMRC did something to you that wasn't legal?

Presumably you'd want to enforce your rights.

Just to clarify it isn't primary legislation, it is secondary - the regulations. Doesn't make any practical difference.

There are several examples of where HMRC practice doesn't match the legislation, but they rarely get challenged.

IQ

wildwestfan

kerry3280 wrote: »

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.

When the bank charges repayment was in full swing they usually offset money repaid against any debt the person had with the bank. This situation appears to be no different.

It may well be that the family members who lent the money might not want to wait 10 years for repayment like HRMC and of course there is always the possible future issue that the OP might not be entitled to any tax credits from which to deduct the overpayments.