Separation of Tax Credit debt?

supermassive

Hi,

My (now ex) partner and I have recently split after 5 years, leaving a few grey areas.

One of these areas is that we were overpaid tax credits in 2014-2015 to the tune of £4295. I have been repaying this myself over the past year or 2 at a rate of £40 per month. I could afford more but as it doesn't have interest applied, I would rather not fork out the money right now.

My question is - now we've split, and it was a joint claim/overpayment, does he also become liable to pay his half of this debt?

I don't know where I stand with tax credits at any time as the whole process is like living in an ever moving rubik's cube.

Thanks in advance!

NYM

Yes, he does.

rockingbilly

supermassive wrote: »

Hi,

My (now ex) partner and I have recently split after 5 years, leaving a few grey areas.

One of these areas is that we were overpaid tax credits in 2014-2015 to the tune of £4295. I have been repaying this myself over the past year or 2 at a rate of £40 per month. I could afford more but as it doesn't have interest applied, I would rather not fork out the money right now.

My question is - now we've split, and it was a joint claim/overpayment, does he also become liable to pay his half of this debt?

I don't know where I stand with tax credits at any time as the whole process is like living in an ever moving rubik's cube.

Thanks in advance!

As it was a joint claim and consequently a joint debt, both of you are jointly responsible for the whole debt.
There is nothing stopping you coming to an agreement with your ex for him to pay half, but that is entirely a personal matter.
HMRC will pursue the individual that is more likely and able to pay. As an example if you had capital and your ex had none, or if you were working and he wasn't, they would look to you to pay the whole lot.

I am surprised that HMRC have not sought an income and expenditure account from you. To say that you will not pay more than £40 a month even though you could leads me to think that either such a document has not been completed and if it was, you have either under stated your income or over stated your expenses.

supermassive

rockingbilly wrote: »

As it was a joint claim and consequently a joint debt, both of you are jointly responsible for the whole debt.
There is nothing stopping you coming to an agreement with your ex for him to pay half, but that is entirely a personal matter.
HMRC will pursue the individual that is more likely and able to pay. As an example if you had capital and your ex had none, or if you were working and he wasn't, they would look to you to pay the whole lot.

I am surprised that HMRC have not sought an income and expenditure account from you. To say that you will not pay more than £40 a month even though you could leads me to think that either such a document has not been completed and if it was, you have either under stated your income or over stated your expenses.

I didn't know such a thing existed. They've never sent me one.

Regardless, we're both in full time employment and own no real assets, so are both in the same position, the only difference being that I earn almost double what he does.

NYM

Household breakdown cases

When a couple split up, and an overpayment arises from their joint claim, HMRC will ask
each former partner for 50 per cent of the overpayment.
If one of the former partners wishes to pay more than 50 per cent, this can be accepted
without the need of agreement with the ex-partner. Former partners may agree, between
themselves, to vary the percentage that they each repay. However, if no offer is made, or a
payment arrangement is not adhered to, HMRC reserve the right to seek 50 per cent from
each former partner.

http://revenuebenefits.org.uk/pdf/How_HMRC_handle_taxt_credit_overpayments.pdf


They won't come after you to pay the entire overpayment despite what Billy has stated.

marliepanda

They will ask you to pay half.

As I'm guessing your joint claim is ending 'now' and not a few years ago when the overpayment happened, it will be half of the balance now.

Only clarifying as you say that 'you' have been paying it back rather than 'we'

Darksparkle

rockingbilly wrote: »

As it was a joint claim and consequently a joint debt, both of you are jointly responsible for the whole debt.
There is nothing stopping you coming to an agreement with your ex for him to pay half, but that is entirely a personal matter.
HMRC will pursue the individual that is more likely and able to pay. As an example if you had capital and your ex had none, or if you were working and he wasn't, they would look to you to pay the whole lot.

I am surprised that HMRC have not sought an income and expenditure account from you. To say that you will not pay more than £40 a month even though you could leads me to think that either such a document has not been completed and if it was, you have either under stated your income or over stated your expenses.

http://revenuebenefits.org.uk/tax-credits/guidance/how-to-deal-with-hmrc/dealing-with-debt/#Time%20to%20pay%20arrangements

Over 12 months up to 10 years
Claimants can ask HMRC to repay over any period up to 10 years without providing full income and expenditure details.

HMRC will not automatically accept any offer up to 10 years and they will want to confirm income/expenditure. HMRC staff will try and negotiate a time to pay arrangement for the shortest possible time, however claimants should ensure what they agree to is affordable and realistic based on their income/expenditure.

Staff are encouraged to try and set up a direct debit arrangement for any time to pay agreements. Generally, repayments of less than £10 per month will not be accepted unless the debt will be cleared in 3 years. Income and Expenditure will be required to justify any arrangement of less than £10 per month if the debt is not cleared within 3 years. If a claimant cannot afford £10 per month, then DM should suspend recovery for twelve months and then review the situation at the end of that period. If the claimant is still unable to pay more than £10 per month following their twelve-monthly review, HMRC should consider remitting the debt on grounds of financial hardship.

Guest101

supermassive wrote: »

Hi,

My (now ex) partner and I have recently split after 5 years, leaving a few grey areas.

One of these areas is that we were overpaid tax credits in 2014-2015 to the tune of £4295. I have been repaying this myself over the past year or 2 at a rate of £40 per month. I could afford more but as it doesn't have interest applied, I would rather not fork out the money right now.

My question is - now we've split, and it was a joint claim/overpayment, does he also become liable to pay his half of this debt?

I don't know where I stand with tax credits at any time as the whole process is like living in an ever moving rubik's cube.

Thanks in advance!

Nope, you are both jointly liable for the whole amount.


They'll take it from the easiest source, which will be you.

Guest101

NYM wrote: »

Household breakdown cases

When a couple split up, and an overpayment arises from their joint claim, HMRC will ask
each former partner for 50 per cent of the overpayment.
If one of the former partners wishes to pay more than 50 per cent, this can be accepted
without the need of agreement with the ex-partner. Former partners may agree, between
themselves, to vary the percentage that they each repay. However, if no offer is made, or a
payment arrangement is not adhered to, HMRC reserve the right to seek 50 per cent from
each former partner.

http://revenuebenefits.org.uk/pdf/How_HMRC_handle_taxt_credit_overpayments.pdf


They won't come after you to pay the entire overpayment despite what Billy has stated.

In practice they just take it from future tax credit claims.

marliepanda

Guest101 wrote: »

Nope, you are both jointly liable for the whole amount.


They'll take it from the easiest source, which will be you.

That is NOT HMRC policy.

Yes it works your way for pretty much everyone else, but not HMRC. Don't post scare stories about things you don't understand.

Guest101

marliepanda wrote: »

That is NOT HMRC policy.

Yes it works your way for pretty much everyone else, but not HMRC. Don't post scare stories about things you don't understand.

1. It's not a scare story
2. HMRC will just take it from the next claim, as an overpayment. Much easier than chasing someone who's moved on.