Tax Credit Repayment Advice

Bennwaa

I was overpaid tax credits by £600 2017-18 and £2100 on 2018-19. This was due to me working a lot of overtime and pushing up my wage plus my wife started a new job upping our household income. I received a letter from HMRC saying I needed to repay a total of £2700 and so I immediately contacted them and came up with a repayment plan. Today I came home to find a letter from a debt recovery agency LCS saying HMRC have passed my debt to them and I needed to pay immediately. The issue I have is when I arranged repayment they sent a letter saying my repayment plan was for the whole amount. (I have a letter confirming this). When I called HMRC today they said they were mistaken and it was just for the smaller 2017-2018 amount. I offered to arrange payment for the latter amount and they have said its too late it's been sent to the debt agency! Is this correct? Also will this affect my credit rating which with help from Moneysaving expert is excellent? I'm due to remortgage in October and  don't want it messed up

born_again

Bennwaa said:

I was overpaid tax credits by £600 2017-18 and £2100 on 2018-19. This was due to me working a lot of overtime and pushing up my wage plus my wife started a new job upping our household income. I received a letter from HMRC saying I needed to repay a total of £2700 and so I immediately contacted them and came up with a repayment plan. Today I came home to find a letter from a debt recovery agency LCS saying HMRC have passed my debt to them and I needed to pay immediately. The issue I have is when I arranged repayment they sent a letter saying my repayment plan was for the whole amount. (I have a letter confirming this). When I called HMRC today they said they were mistaken and it was just for the smaller 2017-2018 amount. I offered to arrange payment for the latter amount and they have said its too late it's been sent to the debt agency! Is this correct? Also will this affect my credit rating which with help from Moneysaving expert is excellent? I'm due to remortgage in October and  don't want it messed up

Can't help on the main point.
But do not fret over that credit rating figure. Only you and the company see that made up figure. 
It is your credit history (missed payments) that will be looked at by any lender.

Icequeen1

No, the debt isn't sold off to the third party company, they are just working on behalf of HMRC to recover it and if they can't it will go back to HMRC. Just phone them and they can set up a payment plan. No impact on credit rating. 

IQ

mcvarrie

Hi, this happened to me, only it was £4000 plus and then I received a further letter saying I owed £715. I set up a repayment plan with HMRC at £40 a month for 10 years (is it 2026 yet??) and all was going along as normal and then I received the debt recovery letter from LCS saying that HMRC are owed a debt and that I must pay it as soon as possible. However, after setting up both repayment plans I received a letter confirming this from HRMC with a reference number on it and when calling up LCS and telling them that “I’ve already set up a payment plan to pay this off.” And then replying with, “Ah, but we’d need a reference number to confirm this, you see?” After telling them the said reference number they apologised for the inconvenience they caused and advised I call HMRC and to ignore any and all letters from them that might have been sent before the matter was cleared up. I did then call HMRC and explained the situation to them and they apologised and told me that there are many different departments with HMRC and sometimes they fall behind in communication. 

So, call LCS with the reference number you hopefully have and then call HMRC. I still have all original letters that I received just in case. 

Bennwaa

Thanks, that’s great advice/info, I still have all letters too so will call today

mcvarrie

Hope it got sorted out  

Bennwaa

Thanks everyone for advice, very reassuring to know you guys are out there to help. 

I phoned again yesterday and spoke to somebody new, who said it had been an admin error and they will contact the debt agency to explain. I have requested a letter confirming this . Thanks guys