Tax Credit Overpayment - advice needed

Hevinlosty

Hi
Could anyone offer any advice regarding a demand l received yesterday for a tax credit overpayment of nearly £1000 that came completely out of the blue and relates to a claim nearly 15 years ago?   I was completely unaware that there was any overpayment, I have never received any letter or notification about it and l continued to receive tax credits for some years until a final award some 5 years ago.  Can HMRC really demand repayment for such a historical claim that l had absolutely no knowledge of?  Why did they just not deduct it from the payments I received after this?  
Many thanks
H 

tacpot12

I would ask them for their evidence that you were overpaid, and also ask them to account for why they hadn't spotted the error until now. If anything in their account suggests they (or their systems) might have made a mistake, you might have a better chance challenging this. 

As far as I know there is no time limit on them chasing overpayments, but I wouldn't pay them anything until they evidence that you were overpaid. 

Ultimately if they can show that you were overpaid, you will be able to arrange a reasonable repayment schedule. Don't forget that anything you do have to repay will go to help people who are in the situation now that you were in 5-15 years ago.  

poppy12345

In this thread here, you said that they sent you a final award notice in 2011, which you didn't receive because you moved house.

https://forums.moneysavingexpert.com/discussion/6217845/tax-credit-debt#latest If you move house and don't change your address then how can you expect to receive your tax credit notification letter?

Hevinlosty

Hi Poppy

I am not sure where you got the impression from that l didn’t receive my final award notice from?  I did receive it but there was no notification of any outstanding amount owing on it.  Tax credits were notified of my change of address and subsequent letters were sent to my new address.  What l said was, according to the Tax Credits office,  the debt notification letter was sent in 2011 which l never received though, as l did receive subsequent letters from them, they were obviously aware of the change of address.  

Icequeen1

Hevinlosty said:

Hi Poppy

I am not sure where you got the impression from that l didn’t receive my final award notice from?  I did receive it but there was no notification of any outstanding amount owing on it.  Tax credits were notified of my change of address and subsequent letters were sent to my new address.  What l said was, according to the Tax Credits office,  the debt notification letter was sent in 2011 which l never received though, as l did receive subsequent letters from them, they were obviously aware of the change of address.  

That can't be right - a debt notification letter can only be issued if there is a debt on the actual award i.e. you received more than your entitlement. So any debt has to be on a final award notice for the year in which it occurred. If the award was later changed, it would be re-finalised. The notices are not easy to understand, is it possible you didn't notice it? Did you continue to get tax credits on the same claim - if there was a break in claim they wouldn't have continued recovery. 

Hevinlosty

I spoke to HMRC and they said it referred to a joint claim which was then changed to a single claim in 2010.  There was no notification that I can recall about a debt.  They continued to pay tax credits for a number of years and, although I was never informed about that debt, I was informed about another, smaller debt.  However, every time I phoned to arrange payment they couldn't find it on the system and I was told it was a system error.  This happened every year for a number of years with ever more threatening letters until eventually I sent copies of all the contemporaneous notes I had made each time I phoned the Tax Credits office and the letters stopped.  I am wondering if (a) this is the same problem and (b) why they haven't informed me of it until over 10 years later .....?

Icequeen1

Hevinlosty said:

I spoke to HMRC and they said it referred to a joint claim which was then changed to a single claim in 2010.  There was no notification that I can recall about a debt.  They continued to pay tax credits for a number of years and, although I was never informed about that debt, I was informed about another, smaller debt.  However, every time I phoned to arrange payment they couldn't find it on the system and I was told it was a system error.  This happened every year for a number of years with ever more threatening letters until eventually I sent copies of all the contemporaneous notes I had made each time I phoned the Tax Credits office and the letters stopped.  I am wondering if (a) this is the same problem and (b) why they haven't informed me of it until over 10 years later .....?

It would be on the joint claim final award notice for the year in which the claim ended. Probably issued quite some time later. It would be finalised after the end of the tax year in which the claim ended. They couldn't recover a joint debt from a single claim so that is why there was no recovery. 

calcotti

What I think often happens is that people have separated. They think the Tax Credits claim has ended so don't realise the need to advise HMRC of any changes of address which means that when HMRC do finalise the award the claimant doesn't get the letter. The debt has then sat there and only resurfaces now that there is a push on to recover historic debt.

Often claimant only finds out because debt has been transferred to DWP who are recovering it from UC and of course DWP hold no details about how the debt arose and claimant is stuck between two departments trying to get information. Both HMRC and DWP debt recovery are particularly unhelpful in my experience.

That doesn't seem to be the case here as OP continued to get Tax Credits but the Tax Credit debt recovery process does seem to be a mess.