Tax credits overpayment £4,000+ please help

SettingIn

Received a bunch of letters yesterday and I have been overpaid for tax years 12/13 and 13/14 to the tune of £4348.

I'm so confused and worried and I was hoping somebody out there who knows more about this subject could help me in trying to work it out.

The overpayment is for 2013/14. I have 2 children aged 2years & 4 years and currently pay £170.90 per week in childcare costs for both.

Actual income for 11/12 was £25476 & 12/13 was £37867. From May 2012 to Jan 2013 I paid £204 per week for childcare, my sons pre school provision reduced that to £170.90 per week from April 2013 to date. I advised tax credits of the change to childcare costs but did not inform them of the expected increase in salary. (Genuine mistake on my part). So after looking through all of these letters I realised that the 13/14 award was based on the £25k salary.

When I informed tax credits of the change to childcare costs due to preschool start, that was in April 2013, I was notified that I was selected for review and received a letter some weeks later asking for all contracts, invoices for childcare, responded to this within 2 days with all the information they requested. Despite phoning them every week I was told it was being looked at and that I must wait for a letter. So renewal time is upon me and still no word from the investigation, renewal pack comes in and I complete and return the renewal form within 1 day. Then 2 days later receive a letter from the compliance team requesting me to phone in as soon as I receive the renewal pack. I phoned to say I had received this letter 2 days after the renewal pack had come in and that I had already submitted my renewal by post. They advised me to leave it a few weeks and it would be sorted and I would receive my final award. I chased and chased this issue but was told on every occasion it was in a backlog of work and would be looked at. That was Aug 2013

I returned home yesterday to 4 separate award noticed, 2 for me & 2 for my husband, both the same details. Stating we have been overpaid by over £4,000.

In a state of panic here, after looking into it I assume this is because of the income used to make the provisional award and me not declaring our incomes until the renewal came in. But they've continued to pay me the same amount despite the investigation and having my renewal with actual figures since July 2013. I have too noticed that the childcare costs the have for the period are £156.00 per week and not £170.90 as stated above and as advised to them.

Can anyone help me here? Is this normal of tax credits? Any advice as to what to do, don't suppose the discrepancy in childcare costs will knock much off the overpayment. I take it also I will receive nothing from now on either?

Caz3121

If the award was based on £25k then with the disregard you would earn up to £30k with no overpayment but anything over that would result in an overpayment.
I think they would class an increase in earnings as a change of circumstances which you should really have advised them about to avoid the overpayment

The entitlement tables give you a rough idea of the amounts so £4k does sound about right
http://www.hmrc.gov.uk/taxcredits/people-advise-others/entitlement-tables/work-and-child/work-pay-childcare.htm

SettingIn

Hi, thanks for replying.
Blondebubbles yes I pay term time only. And with the pre school it's wraparound care plus breakfast club. My notice does say that they will recover from future awards but I'm confused, does that mean we won't receive anything from now until it's paid do you think?
Caz3121, agree I should have told them, I hadn't expected the difference in earnings to be that much.

zagfles

SettingIn wrote: »

Hi, thanks for replying.
Blondebubbles yes I pay term time only. And with the pre school it's wraparound care plus breakfast club. My notice does say that they will recover from future awards but I'm confused, does that mean we won't receive anything from now until it's paid do you think?
Caz3121, agree I should have told them, I hadn't expected the difference in earnings to be that much.

The award notice should tell you how much they're going to pay you from now till April, and from April onwards. In your circumstances you're not over the limit for getting tax credits so they should deduct the overpayment at 25% I think.