Tax credits over payments

tight_scotsman

Hi
My wife and I had a tax credit over payment about 5 years ago. Last year our income dramatically dropped so we started to claim tax credits again.
We also started a payment agreement with HMRC to repay the overpayment.
This year we found we had been under payed around £900 in tax credits. So HMRC took this overpayment to cover the historic underpayment.
My question is if we have an agreement with HMRC to repay the monies owed can they just take the overpayment instead of sticking to the agreed amount.

Any help would be greatly appreciated

mickaveli2001

They shouldn't if you have an agreement in place, and an agreement, which can be 'proven'. This is important. It would make more sense for them to clear it with the underpayment, however it clearly doesn't bode well with you as a £900 sum would be ideal. HMRC seem to do as they please. They have been given the green light to do all sorts of bad practices and other things such as bank arrestment's when no debts have been proven in a court of law. They are a law unto themselves.


It's frustrating dealing with them. My advise would be that unless you have an agreement provable, then be armed for them next time. Make up a list, with snippets from your banks statements showing each payment from them, pairing them up with letters they send and have a bullet proof file, because at some point, they will crawl out their little hole in the future and demand some 'overpayment'

tight_scotsman

Thanks mick we have been paying back since last April when we started to claim tax credits again. The overpayment has been coming out of our award since then.
I was very conservitive with my estimated earnings when I started to claim agian so we would aviod another over payment. Even this year I stated a bit more than I was likely to earn incase I done any overtime ect ect .

mickaveli2001

I'm almost certain that a lot of overpayment letters are auto generated and sent randomly. They will always have the excuse to fall back on 'systematic error' to avoid any liability because their overpayment letters always state that:


"Our records show" that you have been overpaid by £XXXX amount

They tried to do that with me when I claimed working tax credits. It was for a couple of hundred GBP. When I challenged it, they came back empty handed, but in 5 months time sent another demand letter out to the tune of 7k. They take challenges personally, especially when they loose any immediate battles, which is why keeping a file with all relevant info possible helps