Tax Credits Dispute

brokebroke

Short story:

Earlier this year I was alerted to the Working Tax Credit system and encouraged to apply for the tax year 2012 - 2013, due to low earnings during that time and the deadline looming.

Following a successful application, I was awarded a moderate, but helpful and appreciated sum for the year 2012 - 2013. This was paid in 2 x installments in March.

Although I did not have any renewal forms, I wrote to HMRC to inform them that my circumstances had changed and my earnings for the tax year 2013 - 2014 (and ongoing) had changed. I did not want them to process any further payments based on incorrect information. The application form for the 2012 - 2013 year did not leave me with any option to give details past April 2013, so writing to them was my earliest opportunity to inform them of these new circumstances.

I have this weekend, as a special Easter treat, had a letter from HMRC demanding that I repay them 2/3rds of the tax credits awarded due to my income for 2013 - 2014.

Yes, my earnings increased in 2013 as I found myself full time employment and as a result my wages increased. However, this was not until after the start of the new tax year in April 2013 and therefore I do not understand why this has been reflected in the tax credits for 2012 - 2013. It seems that i'm being punished for bettering myself and finding full time employment (which i'm led to believe is something that the government is trying to encourage).


I am still on a low wage, that is barely above the 'living wage', but work 40 hours per week. The amount that they are asking me to repay would cause me financial hardship, albeit on a short-term (2 - 3month), basis.

Please can anybody advise on why they may have done this and how I proceed from here?

I simply cannot understand why I have received this letter when my circumstances for the tax year 2012 - 2013 have (obviously) not changed.

On top of this, I have already had to write to HMRC this month as one of their glorious members of staff decided to take it upon themselves to change my tax code for no known reason, resulting in my being charged 20% on all of my earnings. Needless to say, my confidence in HMRC is at an all time low.

Any help appreciated!

brokebroke

As far as I remember, I was only asked about my income for the tax year 2012 - 2013. I don't remember being asked about 2011 - 2012, though I don't have a copy of the form anywhere to confirm this.

I requested and completed the form in February 2014.

My earnings for 2012 - 2013 were a little over £6k and increased to a little over £16k for 2013-2014.

brokebroke

Thanks.

Looks like I had bad advice to apply for them in the first place then.

I'm quite confused about the dates though as i'm absolutely positive that the form referred to 2012/2013. I also stated that tax year when I initially spoke with the HMRC adviser on the phone to request the form, so assumed i'd have been corrected at this stage.