Penalties for over payment of Tax Credits

gratefulforhelp2

Please can anybody advise me on how harsh the HMRC are likely to be over the issue of over paid tax credits? This has come to light after I read through my tax renewal and noticed I had made a mistake on it. In a nutshell I over-estimated how much my childcare charges would be and when I calculated it properly over the whole year I think I owe them around £1,500. I voluntarily called their helpline to tell them I had made a mistake so I'm hoping this will help my cause.

This has caused me a major amount of panic and stress because when I googled it I found things saying people can be fined up to £3,000 and face imprisonment. I realise this is probably for people who deliberately try to over-claim, but what if they perceive that I have done this on purpose? I am sending them all of my nursery invoices for the year and have said I am fully prepared to co-operate and pay back whatever I owe.

I would really appreciate any advice from people who have gone through the same thing. My stress levels are through the roof and since it will take 28 days to get a decision I can't function at that level of stress for a prolonged period. I'm a working single parent of a 3 yr old.

georgiasdragons

I estimated my childcare fees few years back and over estimated I had to pay back 1900 over ten months 190 a month out my award.


I didn't get a penalty as fees are estimated I think this helps the case.


Try not to worry you have been honest.

georgiasdragons

I had to send proof so copies of invoices marked paid and bank statements as proof of payment.


The lady was understanding who did the full investigation, she amended my award and helped me work out my future ongoing costs.

gratefulforhelp2

Thanks very much for putting my mind at rest. If I could pay it back tomorrow and get it all over and done with I would. It's the stress rather than the money that's causing me the most problems. I'm just not aware of how strict they are.
It's really hard to estimate what your fees are when your hours keep changing all the time too.

bylromarha

I had overpayments a few years back and didn't get penalised.

My frustration was that they kept paying me each month, which kept adding to my debt to them, and they refused to stop the payments even though I requested it twice by phone and once in writing. Ridiculous system.

Mensch

Penalties are very rare at the moment although with the result of the GE last week this will no doubt change eventually (signs are evident that they are on a gradual increase over the last few months).


I think I'm right in saying you are allowed one mistake at the moment (depending on the gravity of the mistake of course, ie claim child care costs when you have none and you're toast from the outset) - do it a second time and you'll be in a bad place financially.

nomi01

Hi. I have received my tax credits letter today stating there is an overpayment. Not a surprise. I was wondering if anyone knows if there was a maximum amount they can be repaid weekly/monthly??
I am unable to get through on the phone and I am trying to calculate what I need to set aside to repay debt.
Thanks

nomi01

Hi blondebubbles.
Due to change in circumstances, I am no longer entitled to credits at present but have arrears that were deducted previously.
I was wondering if there was a limit to what they can insist I repay on a weekly or monthly basis. Unsure if they decide by deciding the total amount OWED over x months or if I can make a payment agreement with them.
Thanks

nomi01

blondebubbles wrote: »

When they want you to repay directly they send you a notice to pay letter. It's says on this you can arrange to repay over 12 months. If that's still not enough they may need to go through your income and expenditure.

Oh ok. Thanks. I will give them a call and get it sorted.

billywilly

gratefulforhelp2 wrote: »

Please can anybody advise me on how harsh the HMRC are likely to be over the issue of over paid tax credits? This has come to light after I read through my tax renewal and noticed I had made a mistake on it. In a nutshell I over-estimated how much my childcare charges would be and when I calculated it properly over the whole year I think I owe them around £1,500. I voluntarily called their helpline to tell them I had made a mistake so I'm hoping this will help my cause.

This has caused me a major amount of panic and stress because when I googled it I found things saying people can be fined up to £3,000 and face imprisonment. I realise this is probably for people who deliberately try to over-claim, but what if they perceive that I have done this on purpose? I am sending them all of my nursery invoices for the year and have said I am fully prepared to co-operate and pay back whatever I owe.

I would really appreciate any advice from people who have gone through the same thing. My stress levels are through the roof and since it will take 28 days to get a decision I can't function at that level of stress for a prolonged period. I'm a working single parent of a 3 yr old.

If that is the case then the simple answer when you are estimating amounts, always go well under. It is far better to have HMRC owe you money than for you to owe them and be at risk of being thought of as a fraudster.

billywilly

gratefulforhelp2 wrote: »

Please can anybody advise me on how harsh the HMRC are likely to be over the issue of over paid tax credits? This has come to light after I read through my tax renewal and noticed I had made a mistake on it. In a nutshell I over-estimated how much my childcare charges would be and when I calculated it properly over the whole year I think I owe them around £1,500. I voluntarily called their helpline to tell them I had made a mistake so I'm hoping this will help my cause.

This has caused me a major amount of panic and stress because when I googled it I found things saying people can be fined up to £3,000 and face imprisonment. I realise this is probably for people who deliberately try to over-claim, but what if they perceive that I have done this on purpose? I am sending them all of my nursery invoices for the year and have said I am fully prepared to co-operate and pay back whatever I owe.

I would really appreciate any advice from people who have gone through the same thing. My stress levels are through the roof and since it will take 28 days to get a decision I can't function at that level of stress for a prolonged period. I'm a working single parent of a 3 yr old.

If that is the case then the simple answer when you are estimating amounts, always go well under. It is far better to have HMRC owe you money than for you to owe them and be at risk of being thought of as a fraudster.

In my dealings with HMRC (self assessed tax return) I always round up my income and for the past two years have failed to claim two tax repayments (2013/4 £7.50 & 2014/5 £96.20). That way if there was ever a situation that they came back to me I could always argue that there may have been a mistake made by me, but despite that, you still owe me money.

In the same way I always keep money in the current account equal to a month's total direct debits. That way if I forget to transfer money in or there is a delay in payments going in I know that the DD's will be paid.