Slight panic

Daisy2015

So my bankruptcy was done on Monday and today in the post I get a letter saying I have been overpaid child tax credits in 2014 to the tune of £1600!
I had absolutely no idea how or why that happened. There is an identical letter addressed to my husband sp presumably the same thing (we separated just over a year ago)
So, can this be included in my bankruptcy? If so will it only be half as at the time my husband was unemployed so I guess payments belonged to both of us? He has no idea I have gone bankrupt and I don't want him knowing either (yes I realise he could find out if he searched but he'd have no reason to)

Robinho

Are you still in receipt of them? If so, they will reduce your payments to reclaim the overpayment.

fermi

After a few decisions in the High the Supreme Court over the years, it is now the position that HMRC are not entitled to either demand payment of this, or recover it from any ongoing benefit.

40.44 Overpayment of state benefits

Overpayment of state benefit, such as housing benefits, jobseekers allowance or tax credits may be made as a result of mistakes, change of circumstances or fraud.

It has been held by the Supreme Court URL="https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch37-48/chapter40/part2/Part%202%20notes.htm#22"]note 23[/URL that overpayments of benefits are contingent liabilities (see paragraph 40.9) and, as such, are provable debts. This decision over-ruled earlier decisions generally declaring such debts as non-provable URL="https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch37-48/chapter40/part2/Part%202%20notes.htm#24"]note 24[/URL URL="https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch37-48/chapter40/part2/Part%202%20notes.htm#25"]note 25[/URL.

Such a debt incurred through fraud would not however be released upon discharge (see paragraph 40.178).

The trick is getting HMRC to recognise that fact though. It is frequently a BIG struggle.

Daisy2015

No I don't get them anymore. Guess I need to phone and find out what will happen.
Who is meant to pay them back tho? Me? My husband and me half each? God stressed is not the word

fermi

Normally HMRC will tell you a load of bull that they are not covered. The law is clear though, they are.

fermi

See: https://forums.moneysavingexpert.com/discussion/4790112

The case to quote to HMRC if they try to mislead you that the amount is recoverable is the Supreme Court Judgement Nortel and others [2013] UKSC 52

tigerfeet2006

Fermi, will they still be able to recover them in full from her ex husband?

fermi

If he's not BR, then yes.

Daisy2015

He isn't BR and is working. Will he need to pay the whole amount or just half? I've been reading up but not sure on this one..

Also when he wants to know why he has to pay it and not me, will he be told because I am BR? I'll have a bloody heart attack if so

I still don't even understand how I have an overpayment. I was only getting them for one child, the letter says for child tax credits up to August 2014, child then went to university and the credits stopped, so how on earth I was overpaid I don't know. I'll call Monday and try to find out. Never rains but it pours

Cobalt77

Daisy2015 wrote: »

He isn't BR and is working. Will he need to pay the whole amount or just half? I've been reading up but not sure on this one..

Well, if you've both been sent overpayment letters then it appears HMRC hold you both as being jointly liable.

General convention in the case of joint liabilities (e.g. Council tax, loans, bank accounts etc) is each party will be considered "jointly and severally liable" - this means if it's not possible to recover from one party (usually because they've died), then the other party will be liable for the full amount.

So, your "ex" will probably end up being chased for the full amount once HMRC accept you are BR and so no longer liable.

HTH