Is it sometimes impossible to avoid a Working Tax Credit overpayment ?

spiritus

Example:


Mr A was eligible to receive WTC from April 2013.


Mr A starts receiving WTC payments every month from April 2013.


Mr A finds a job in September 2013 and informs the tax office immediately.


WTC amount is amended to reflect the increase in household income.


Mr A completes the WTC renewal pack in 2014 declaring his income for 2013/2014


Tax Office declare that Mr A has been overpaid from April 2013-September 2013 and must now pay back all of the WTC he has been paid.


Question:


Was there anything that Mr A could have done to avoid an overpayment situation or is it sometimes inevitable that an improvement in your circumstances automatically triggers an overpayment situation.


I may be a lone voice with this but I struggle to get my head around the whole concept.


Why do Job Seekers not have to pay back their JSA when they find a job in a particular tax year ?

HappyMJ

Was Mr A working from April to September and the job he found in September paid much more than the job he had. Getting a pay increase over the disregard will cause an overpayment which needs repaying as it's an annual benefit. JSA is a weekly benefit.

john1002

its the disregard I always find hard to work out, especially as people have said it can be 2 years before your actual wage is taken into account for the working out of tax credits. I say this in my circumstances, start work in September and my income increasing due to this work salary so I will have the disregard impact my 15/16 payments and then my actual salary figure will go from 16/17.


Confusing and yes I think I will have the overpayment issue at some stage.


john

spiritus

HappyMJ wrote: »

Was Mr A working from April to September and the job he found in September paid much more than the job he had. Getting a pay increase over the disregard will cause an overpayment which needs repaying as it's an annual benefit. JSA is a weekly benefit.

Hi and no


Mr A was not working from April to September. He began a job at the end of September.

When_the_going_gets_tough

but he should not have been receiving WTC if he was not working at all. Something wrong here

spiritus

Apologies. He was not working an an employee. He was working self employed.

Icequeen99

It is entirely possible to have an overpayment in the way you describe. They are built into the system and unless you have a crystal ball it's hard to avoid them.

IQ

zagfles

Yes, this can also apply where you lose your job, then find another one 6 months later. There is no disregard for in-year increases.

There are quite a lot of circumstances in which you can get an overpayment even if you tell HMRC every change immediately and even if they act on it correctly and immediately.