🗳️ ELECTION 2024: THE MSE LEADERS' DEBATE Got a burning question you want us to ask the party leaders ahead of the general election? Submit your suggestions via this form or post them on our dedicated Forum board where you can see and upvote other users' questions. Please note that the Forum's rules on avoiding general political discussion still apply across all boards.

TC overpayment demand when the problem is with their system, not me

Options
Hi,

nice start to the weekend- just had a demand for 8k from HMRC for tax credits (pound sign dont work on keyboard).

Is it normal for tax credits to not be adjusted until the next tax year. (i,e, based on last years income).
to cut a long story short, i went from maximum TCs while out of work to zero TCs (Dec 2012), told them straight away, they sent out confirmation of this but they kept paying me the full TC amount until i sent my renewal form after the following end of tax year (June 2014).

seems a flawed system when they knew I would have to pay it all back but never told me (luckily I was expecting this to happen).

Going to call them next week.

Should I expect them to stick to a 12 month plan or give me a bit of leineancy considering its the system at fault, not me and the amount involved?

Comments

  • mickey54
    mickey54 Posts: 383 Forumite
    Options
    dazzammm wrote: »
    Hi,

    nice start to the weekend- just had a demand for 8k from HMRC for tax credits (pound sign dont work on keyboard).

    Is it normal for tax credits to not be adjusted until the next tax year. (i,e, based on last years income).
    to cut a long story short, i went from maximum TCs while out of work to zero TCs (Dec 2012), told them straight away, they sent out confirmation of this but they kept paying me the full TC amount until i sent my renewal form after the following end of tax year (June 2014).

    seems a flawed system when they knew I would have to pay it all back but never told me (luckily I was expecting this to happen).

    Going to call them next week.

    Should I expect them to stick to a 12 month plan or give me a bit of leineancy considering its the system at fault, not me and the amount involved?
    Sorry...if you knew it was going to happen, why didn't you set the money aside?
  • dazzammm
    dazzammm Posts: 78 Forumite
    Options
    our income went up by more than 20k!

    I did keep it aside but was then told it would be clawed back through this years TCs but they didnt give a breakdown as to how much this would be per week so I wasnt so diligent at keeping the savings. Obviously they werent getting as much back as I thought
  • Icequeen99
    Icequeen99 Posts: 3,775 Forumite
    Options
    dazzammm wrote: »
    Hi,

    nice start to the weekend- just had a demand for 8k from HMRC for tax credits (pound sign dont work on keyboard).

    Is it normal for tax credits to not be adjusted until the next tax year. (i,e, based on last years income).
    to cut a long story short, i went from maximum TCs while out of work to zero TCs (Dec 2012), told them straight away, they sent out confirmation of this but they kept paying me the full TC amount until i sent my renewal form after the following end of tax year (June 2014).

    seems a flawed system when they knew I would have to pay it all back but never told me (luckily I was expecting this to happen).

    Going to call them next week.

    Should I expect them to stick to a 12 month plan or give me a bit of leineancy considering its the system at fault, not me and the amount involved?

    When they sent out the confirmation it would have told you that you had been overpaid but that to avoid hardship they would continue payments and these would increase the overpayment. It asked you to contact them if you didn't want this to happen.

    Did you contact them after you received the award notice to tell them not to pay you?

    BB's questions are important because your timeline doesn't quite make sense.

    IQ
  • dazzammm
    dazzammm Posts: 78 Forumite
    Options
    ok, this timeline should help

    Dec '12 - started job after being out of work for 3 years
    Dec '12 - informed HMRC of yearly salary and received notification of change from HMRC

    May '13 - filled in renewal forms stating previous years income (would have been for only 4 months work due to when started job)
    June '13 - new award letter - amount paid unchanged from previous year.

    May '14 - filled in renewal forms stating previous years income (would have been for full year)
    June '13 - new award letter - stated overpayment of £8k from previous year would be claimed back through reduced tax credit payment. tax credit actually paid reduced from £150+ to £10 per week.

    June '15 - demand for £8k.
  • dazzammm
    dazzammm Posts: 78 Forumite
    Options
    as the timeline says i told them within the same month of starting and received notification to that effect. the award sent to me the following May also had the figure I gave them but the TC being paid was unchanged
  • Icequeen99
    Icequeen99 Posts: 3,775 Forumite
    Options
    BB is on the right track.

    It seems what has happened here is that you told them in 12/13 you had started work and what your annual salary would be, but when you filled in the renewal, it was only 4 months worth of salary.

    This means they based your 13/14 payments on a low 12/13 income, but in fact your 13/14 was much higher - but you didn't confirm your 13/14 income until after the year ended.

    Your award notices sent to you after April 2013 would have said the income they were using and would have said something like 'tell us if you expect your income for 13/14 to be higher than xxxx'. If you didn't do that, and waited until renewal, then that is most probably why you have the overpayment.

    IQ
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 8 Election 2024: The MSE Leaders' Debate
  • 343.9K Banking & Borrowing
  • 250.3K Reduce Debt & Boost Income
  • 450K Spending & Discounts
  • 236K Work, Benefits & Business
  • 609.2K Mortgages, Homes & Bills
  • 173.4K Life & Family
  • 248.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards