Tax Credit overpayment - passed straight to a debt agency

Sku11

Due to a change in working hours from 30 hours to 24 hours my entitlement to Tax Credits is 0 so my overpayment becomes due in full. So I'm working less hours receiving less income and I was informed by HMRC "We will be asking you to pay back this amount directly to us" Fair enough I suppose although a little illogical .... heard nothing further until I received a letter from LCS (Trading style of 1st Locate (UK) Ltd) "HMRC records show that your tax credit debt remains unpaid and the debt has now been passed to us to deal with" requesting I call them.

Seems strange to me that whilst I acknowledge the Overpayment, they haven't even asked me to pay anything at all, preferring to pass on what they now class as a debt, to an agency but are happy to pay commission to that agency, to ask me on their behalf!

Darksparkle

Working less hours doesn't make an overpayment go away.

You should have received a notice to pay letter from HMRC before its passed to DCA.

dippy3103

The letter saying that you had to repay them directly seems to me to be a request for payment.
Had you still been entitled to tax credits, they would have deducted the overpayment from that.
How much do you owe & why?

Sku11

That's 2 of us that agree on that Darksparkle .....

Sku11

Sku11 wrote: »

I was informed by HMRC "We will be asking you to pay back this amount directly to us"

Suggests that they will be asking .....

Darksparkle

So call them and ask if a notice to pay letter was sent first?

I would say though, does it really matter Have you tried discussing it with DCA?

How much do you owe? Can you afford to repay any of it? If you could attempt to repay over 12 months they'd normally accept this quite happily.

If more than 12 months, they generally won't accept less than £10 per month.

Sku11

Darksparkle yes that would seem like a good idea ... I was just wondering whether this was a common procedure to involve debt recovery agencies so early.... Cheers

Sku11

OK phoned them and they explained that because the overpayment was an old one from 07/08 whilst receiving Working Tax Credits the overpayment was being part collected by reduced payments and that as I am able bodied I must work 30 hours minimum to qualify for Working Tax Credits, since I no longer qualify for Working Tax Credits the overpayment gets passed on to agencies for settlement without any Notice To Pay letters being sent despite them stating "We will be asking you to pay back this amount directly to us"

Looks like I will have to either make up the working hours to 30 or raid the piggy bank

Thanks

Darksparkle

Did you reduce your hours for a reason? Eg disability?

Sku11

No it was to avoid working Sundays ... I didn't realise the full implications at the time though :eek: