Renewal of Tax Credits and result of not filling in paperwork

Stevepm

Hi,
Just want to check this if anyone knows the answer to my dilemma.
About 3 or 4 years ago, our circumstances changed during the renewal of tax credits time. Wrongly, in hindsight, instead of letting HMRC know or sending the form back saying we are not claiming anymore we just left the form and let the payments stop, which they did. Sometime later or even possibly the year after I received a invoice for the whole tax credits we had claimed over the previous two years. I wrote to them and explained what happened and they simply said it wasnt good enough. They said I could appeal. So I wrote to them and explained that i did not realise I could simply not allow it to finish I had to fill in the renewal saying we were no longer claiming tax credits. I explained though that we were entitled to the tax credits it seemed harsh asking for two years worth of credits back simply because of a paperwork mistake. They denied my appeal and demanded the tax credit payments back. So I had to arrange a plan to pay monthly to clear the balance.
It still hurts physically and financially and how they would not listen or even be reasonable about it and how aggressive they were in getting money back despite our entitlement..
So, is there anything I can do a few years later as we are struggling financially?

poppy12345

Tax credits are based on annual income and you should have filled out the form, rather than just ignore it. There won't be anything you can do about it now. As you had the overpayment it will need to be repaid back. If you are struggling financially then you could contact them to ask them to reduce the payments.

I'm assuming you're no longer claiming tax credits. If you have low income have you looked into claiming Universal Credit? Whether you're entitled to it will depend on your circumstances. Use a benefits calculator to check entitlement.

https://www.entitledto.co.uk/

JessicaF_2

Stevepm said:

Hi,
Just want to check this if anyone knows the answer to my dilemma.
About 3 or 4 years ago, our circumstances changed during the renewal of tax credits time. Wrongly, in hindsight, instead of letting HMRC know or sending the form back saying we are not claiming anymore we just left the form and let the payments stop, which they did. Sometime later or even possibly the year after I received a invoice for the whole tax credits we had claimed over the previous two years. I wrote to them and explained what happened and they simply said it wasnt good enough. They said I could appeal. So I wrote to them and explained that i did not realise I could simply not allow it to finish I had to fill in the renewal saying we were no longer claiming tax credits. I explained though that we were entitled to the tax credits it seemed harsh asking for two years worth of credits back simply because of a paperwork mistake. They denied my appeal and demanded the tax credit payments back. So I had to arrange a plan to pay monthly to clear the balance.
It still hurts physically and financially and how they would not listen or even be reasonable about it and how aggressive they were in getting money back despite our entitlement..
So, is there anything I can do a few years later as we are struggling financially?

Something isn't quite right in what you say - the failure to return a renewal form doesn't automatically result in having to pay back 2 tax years of tax credits. Only payments received between April and when the payment stop would be repaid due to failing to fill in the form. The previous year would be finalised based on the information HMRC held - if that was inaccurate then it may mean there was an overpayment but if they had your earning figures and they were broadly correct you would have probably an an overpayment anyway even if you had filled in the form. 

Stevepm

poppy12345 said:

Tax credits are based on annual income and you should have filled out the form, rather than just ignore it. There won't be anything you can do about it now. As you had the overpayment it will need to be repaid back. If you are struggling financially then you could contact them to ask them to reduce the payments.

Thanks for your comments, I thought as much. One strike and you are out, yet when they make a mistake you have to accept whatever they decide. Yes we were entitled to Universal Credit, even thats a nightmare. I started full time employment in February but been on Furlough since the 3rd week of march, so universal credit was cancelled and we are managing with help from relatives at the moment. 

Stevepm

JessicaF_2 said:

Something isn't quite right in what you say - the failure to return a renewal form doesn't automatically result in having to pay back 2 tax years of tax credits. Only payments received between April and when the payment stop would be repaid due to failing to fill in the form. The previous year would be finalised based on the information HMRC held - if that was inaccurate then it may mean there was an overpayment but if they had your earning figures and they were broadly correct you would have probably an an overpayment anyway even if you had filled in the form. 

Thanks Jessica, If you are correct I knew it wasnt fair or reasonable how they decided to claim 2 years worth of Tax credits back after agreeing that we were entitled to them in the first place. They were really aggressive, but after they declined my appeal no one would even talk about it, they just insisted on getting the tax credits back asap. Its Disgusting.

Spoonie_Turtle

Stevepm said:

poppy12345 said:

Tax credits are based on annual income and you should have filled out the form, rather than just ignore it. There won't be anything you can do about it now. As you had the overpayment it will need to be repaid back. If you are struggling financially then you could contact them to ask them to reduce the payments.

Thanks for your comments, I thought as much. One strike and you are out, yet when they make a mistake you have to accept whatever they decide. Yes we were entitled to Universal Credit, even thats a nightmare. I started full time employment in February but been on Furlough since the 3rd week of march, so universal credit was cancelled and we are managing with help from relatives at the moment. 

What exactly do you mean UC was cancelled? Do you mean you earned enough to reduce your entitlement to nothing? 

Stevepm

What exactly do you mean UC was cancelled? Do you mean you earned enough to reduce your entitlement to nothing? 

Yes, I went from being self-employed to full time employment in February 2020, I let UC know and what my gross pay was and I got a email saying we no longer qualified, only to find a couple of weeks later that i was being furloughed and now only getting 80% of my wage. I feel like i am the wrong man in the wrong place making wrong decisions all the time, although 80% of a wage is far more than we received from UC

poppy12345

Stevepm said:

What exactly do you mean UC was cancelled? Do you mean you earned enough to reduce your entitlement to nothing? 

Yes, I went from being self-employed to full time employment in February 2020, I let UC know and what my gross pay was and I got a email saying we no longer qualified, only to find a couple of weeks later that i was being furloughed and now only getting 80% of my wage. I feel like i am the wrong man in the wrong place making wrong decisions all the time, although 80% of a wage is far more than we received from UC

An email saying you no longer qualified for UC? Do you mean your earnings reduced your UC to zero and therefore your claim was closed? If this happens then you need to make a rapid reclaim from your journal. You'll keep the same assessment periods as you previously had. Whether you're entitled to anything will depend on your circumstances.

Spoonie_Turtle

Stevepm said:

What exactly do you mean UC was cancelled? Do you mean you earned enough to reduce your entitlement to nothing? 

Yes, I went from being self-employed to full time employment in February 2020, I let UC know and what my gross pay was and I got a email saying we no longer qualified, only to find a couple of weeks later that i was being furloughed and now only getting 80% of my wage. I feel like i am the wrong man in the wrong place making wrong decisions all the time, although 80% of a wage is far more than we received from UC

It may very well be worth reclaiming as @poppy12345 says, just to see if you're entitled to anything now. The standard allowance and the housing allowance have temporarily gone up (for a year) due to the economic effects of the pandemic and your wage isn't deducted in full. If you want to have a go at working out whether it's worth it you could put your details into a benefit calculator https://www.gov.uk/benefits-calculators
or have a look at how it's worked out here https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/how-much-youll-get/

Stevepm

I have just logged in to Universal credit online and this is exactly what the main page says: 

Your claim has been closed

You and your partner were not eligible for Universal Credit between 3 February 2020 and 2 March 2020.

Your joint income was the same as the maximum amount you're allowed to earn. This means your Universal Credit has reduced to £0.

You can find more information in your journal or your statement.

If you want to start Universal Credit again

You will need to make a new claim for Universal Credit. If you do this before 3 August 2020 you will not need to enter all of your details again.

Stevepm

Thank you all for your comments i will put in a new claim.
I guess i will have to leave the tax credit issue
thanks
steve