so frustrated

taylor8571

Hi all, I wanted to post on here after a very frustrating call to tax credits that has left me quite upset, and wanted to know whether anyone else has been through the same.

Basically 8 weeks ago I sent in my annual renewal, have been awaiting the renewal and have heard nothing from them in that time, they have been paying me a lesser amount because they had based the award on their real time earnings, but we pay into a personal pension which can be deducted, this is then usually resolved and payments return to normal, usually after a while they then contact me to ask for evidence that we pay our pension and I send in bank account statements showing the amounts paid and pension proof and they then write back and state all is ok. The last time I sent in proof was in December 2014 and all was confirmed and ok.

Today whilst logged on to my banking I realised that they have paid me a much lower amount than the lesser amount they have been paying so I gave them a call.

The first advisor stated that this was because we had had an overpayment, I asked how, as although my husband had received a wage increase it was way below the income rise disregard of £5000, the advisor said he couldn't help and said he would put me through to overpayments.

The man I spoke to there said yes we have had an overpayment, when I asked why he gave me a figure which didn't take into account the pension deductions, I asked him why they had not contacted me as I could have sent in any information they wanted, and was told that I would have to wait for the form to get to me and then dispute the overpayment, I of course said I don't need to dispute the overpayment, I have deducted the pension as we are allowed, if you needed proof of that pension you just needed to ask as you usually do and I would have sent it in, rather than being in this situation where you have halved our tax credits, he stated that they use real time info and that they use this to base the award on.
I told him I would send the info in to prove as I always do and he said NO you have to wait for the award, I was not happy at this, as I have waited for 8 weeks and am unhappy as there has been no overpayment, so I asked where to send the proof, he said rather rudely tax credits.

Eventually I got off the phone from him as it seemed that he was not listening to what I was saying and I decided to ring the helpline to ask where to send the info to, a really helpful advisor there transferred me to the main office and a lovely man there said yes we have the figures you sent us, and we know you pay into a pension, so I don't see why they are using the figures they have as this will of course show an overpayment, he agreed that they should written to me to confirm this rather than just presuming, he also said he would get our tax credits re instated to the full amount and that if I could send in the documents that I usually did this would confirm what they already knew, he apologised and said that we were caught between a rock and a hard place, and he is right, we fill in the form deducting our pension as we are allowed to every year, nothing on that form states that we have deducted the pension as there is no box to tick, we can then only wait the final award.

I have been so upset by this as I feel it is just so unnecessary, we have been living on a reduced tax credits for 8 weeks, but to have it cut by half because they decide to ignore what we have told them and what they know already about the pension, surely they could have written asking for more info if needed, basing the award on their real time information does not take account of pension deductions and this could have been easily rectified weeks ago, rather than putting us through all of this, we have had no overpayment as the manger correctly stated.

If they decide to ignore the figures we send them and only base the award on the real time information they hold then it really seems quite pointless in sending in a form showing the correct information if they will just use what figure they choose.

When will they give us a box to tick to show that we have deducted pension payments, this could save all this trouble in the long run.

just wanted to know if others have been through similar.

giddypenguin

We had the same problem this year - I estimated our income for 14/15 taking into account the £100pw disregard for SMP. When we got our P60s I then phoned (on the advice of blondebubbles - thanks ;-)) to update them with the new information - this was overall a little less than I estimated so our payments went up.

By the time our renewal had come round our payments had halved - I gave them a ring to ask why, and they said it was because they got my income information from my employer, this was higher than I declared, so adjusted our payments accordingly. They didn't take into account the SMP disregard!!

I was very lucky to speak to a very nice man at tax credits (who found that our whole application was a bit of a mess due to my husband doing temp work for numerous agencies last year) who spent around 45 minutes making sure everything was right. Within 4 weeks an underpayment was repaid to me, and this years credits have been adjusted back to what they should be.

It just seems a silly system to me - and requires extra administration. If they just asked for your calculations when declaring your income (and maybe send in proof at the same time??) rather than just a figure, when they get this 'real time' information they can reconcile it with your figures and ignore it where necessary...

ETA: One thing I will not be doing is EVER throwing away any financial information! I'm always a bit worried that at any moment some 'new' information will come in, over riding everything I've told them previously, and we'll have to go through all these re-calculations again!

taylor8571

Thanks for both your reply's, to be honest I was unaware of real time information until I got my renewal form, but didn't think it would be an issue as if they had looked at my previous claims they would have seen that the difference was the pension, and seeing as they only asked for this info 6 months ago I thought they would have tallied it up, how wrong was I.

like you I spoke to a nice man who could see immediately what had happened and he stated that he would get our payments back to what they should be whilst I send in the pension and bank statements, he also said things would be backdated.

RTI is a good idea and in the future will save anyone being overpaid as any issues will be able to be recognised and sorted a lot earlier, but this is one of the flaws, and I know that things like this happen, but I don't think that there was any need for the bad attitude of the man at overpayments, his attitude was "you have been overpaid" even when he could see what had happened, he would not however admit that the discrepancy was the pension, telling me I have been overpaid and I must pay it back where as the other man dealt with the issue and told me I wasn't in the wrong and that he could see exactly what was wrong.

Well I have certainly learned my lesson the hard way, and have been struggling on reduced money for 8 nearly 9 weeks, hopefully when I get a new job I will be able to come off tax credits for good and then that way I wont have to run through hoops to claim what I am entitled too, as I cant cope with the way some of the advisors treat you as if you were a crook.

Will now look into Rti now to see what issues it causes and will mention it in the letter I intend on sending to my MP, as I think that these issues it causes need to be sorted out.

zagfles

Yes it's a ridiculous way to do things. The form dates back to the introduction of tax credits, when Gordon Brown was getting a lot of stick for overcomplicating things, so they decided the tax credits form would be simple "light touch" assessment of income which didn't ask too many questions.

Trouble is the form is far too simple for the complicated system of tax credits, and you end up basically have to put the "wrong" information on the form because there is nowhere to claim deductions eg for SMP, pension conts, gift aid etc.

In the old days they accepted what you put on the form, and six months later you might get a letter off them saying "our record don't match, we're altering your "finalised" award unless you contact us with evidence.

These days, they use the RTI info on the renewal, so reduce your payments in the renewal window, then when they process your renewal and the figures don't match, they again ignore them and basically accuse you of fraud/incompetance rather than asking you to explain the discrepancy.

Yet they waste an entire page of the 4 page form asking what colour your skin is. Instead of asking you about pension conts, gift aid, SMP etc. Legacy of New Labour;)

I don't know why pension providers aren't plugged into the RTI system. They have your NI number, they claim tax relief off HMRC, so it should be easy enough for them to provide RTI info. They probably are when they're paying pensions!

taylor8571

Sorry Blondebubbles, I am not sure I understand what you are saying? do you mean on their side or ours? We have reported pension payments for quite a few years now, and always complied with them when they requested the information, in this instance the reason for them stating that we have been overpaid is because their RTI shows that we earned more than we declared, on our side we report and we comply, they then ignore and accuse.

All this needs is for a box to be placed on further forms so it can be ticked to show that the discrepancy is due to pension payments, and then anyone deducting pensions can tick the box and also then send in the proof that they pay the pension, and seeing as this was flagged up last year I would have thought that they would have done this, would save a lot of time and money and stress for the claimant.

And yes Zagfles you are right they add a whole page asking me what colour I am when that makes no difference to the claim, how simple would it be to just add that extra deductions box?

I have a theory on that too, the reason I think they omit the box is that too many people would actually claim what they were entitled to, some people still don't realise that they can deduct a pension because there is no box to tell them to, and I know this because I only found out a few years ago myself, on the first occasion I acted on it they asked for what we paid, when I sent them the information they sent it back and said that all was ok......it wasn't till a few years later that I realised that I had never grossed up the payments we make and guess what, when they did their check they never mentioned it to us either when it was clear from our calculations that we had only used net, so we actually didn't get what we were entitled to for a few years.

SkyeKnight

taylor8571 wrote: »

I have a theory on that too, the reason I think they omit the box is that too many people would actually claim what they were entitled to, some people still don't realise that they can deduct a pension because there is no box to tell them to, and I know this because I only found out a few years ago myself, on the first occasion I acted on it they asked for what we paid, when I sent them the information they sent it back and said that all was ok......it wasn't till a few years later that I realised that I had never grossed up the payments we make and guess what, when they did their check they never mentioned it to us either when it was clear from our calculations that we had only used net, so we actually didn't get what we were entitled to for a few years.

The same for Gift Aid donations which they go out of their way to stop you deducting. It's not even mentioned on the form. I only looked it up when I realised a top rate tax payer friend of mine (on a very high 6 figure salary) was keeping all his receipts for entry into zoos and museums so he could get 20% back on his tax return - it seems to be expected that this money will be claimed back by high earners (well, their accountants anyway).

Lower earners on the other hand, get told on the phone, "Oh, you shouldn't deduct Gift Aid payments - it's too complicated." When I said I would like to give it a try I got told that I couldn't because "You need to have receipts for them". Like I'm too stupid to keep a few receipts in a drawer! They also refused to gross it up on the phone, because they couldn't do the maths. I just send them the form with the correct numbers which they ignore, then send them a letter later with the correct numbers again and my calculations. This seem quite inefficient for both of us.

NYM

Just complete Form TC825 for Gift Aid, Pension Contributions and Trading losses

Working Sheet TC825

taylor8571

oh I see now, well it doesn't really make a difference in our case, all we can do is report the facts, and as it seems the "tax credits system" can then ignore them, the man on the phone said they have to go off RTI, its utter madness, and just causes a lot of paperwork and stress, they make the rules, and when you keep to them they punish you, so a family like ours is really in a no win situation, even the man at tax credits ( the nice man) said we are stuck between a rock and a hard place and that's why he said he would reinstate our money whilst we send in the documents.

I can see now what you are stating about RTI and as I said I also think it has it merits, but in cases such as ours it only helps to act as confusion for the overpayments teams who seem to revel in the fact they may have 'caught' an overpayment.

Sort the system out, refine these issues and at the very least train the overpayments teams to recognise that this is an anomaly, that way many people will not have to be made to feel so bad.

have to go now as have to use half a tree to inform tax credits of what we pay into our pension ;-)

zagfles

SkyeKnight wrote: »

The same for Gift Aid donations which they go out of their way to stop you deducting. It's not even mentioned on the form. I only looked it up when I realised a top rate tax payer friend of mine (on a very high 6 figure salary) was keeping all his receipts for entry into zoos and museums so he could get 20% back on his tax return - it seems to be expected that this money will be claimed back by high earners (well, their accountants anyway).

Lower earners on the other hand, get told on the phone, "Oh, you shouldn't deduct Gift Aid payments - it's too complicated." When I said I would like to give it a try I got told that I couldn't because "You need to have receipts for them". Like I'm too stupid to keep a few receipts in a drawer! They also refused to gross it up on the phone, because they couldn't do the maths. I just send them the form with the correct numbers which they ignore, then send them a letter later with the correct numbers again and my calculations. This seem quite inefficient for both of us.

Exactly - and it's well worth it - a day out at a zoo or a National Trust property or loads of other places that do gift aid, tax credits will pay over half the cost! Even more under the new higher taper. Subject to disregards for income changes etc.

I think there's a rule that you need to pay 10% over the normal admission cost to get gift aid, or get an annual pass (which is sometimes the same as a single entry ticket - eg the national space centre AIRI). But it's well worth paying the extra 10% to get 51% of the cost back through tax credits. Or 60% next year.

zagfles

NYM wrote: »

Just complete Form TC825 for Gift Aid, Pension Contributions and Trading losses

Working Sheet TC825

Yup - but when you send your renewal you can't send them the TC825, or even indicate you've filled it in. Even if you tell them on the phone you've made deductions as per the form they often ignore it.

You have to wait till they basically accuse you of fraud by writing to you stating that "you said your income was xxx, RTI says it was yyy, so we're going to use yyy to finalise your award".

Rather than "RTI information doesn't match your figures, please explain the difference and send us evidence before we finalise your award".

NYM

Can't people attach a copy of it to their renewal forms ? At least then the TC dept would see how they've calculated the figures they've entered on the renewal.

...or is that too simple.