tax credit overpayment from 17 years ago, advice please

lilsweetie

Hi

My mum has received a letter through the post suddenly from HMRC telling her that she owes £600 from 2004. This has come as a complete shock for my mum, as she was aware of an overpayment at the time and she arranged a repayment plan, and as far as she was aware the debt had been settled. The year 2004 is when she split / divorced my dad and they mentioned on the phone he would also be getting a letter, i have no contact with my dad so have no way of knowing if he has received this or not. 
She has rang tax credits who say she did indeed start paying it back but then payments stopped, she would definitely not have stopped this, she is the type who wouldn't sleep if she was in debt, as far as she was aware she had paid it back. She would have been continuing to receive some support then as she became a single mum on a low income so she didn't stop her benefits or anything. We have an appointment with Citizens advice on friday for a phone call but i just wanted to see if anybody has advice about what she does about this? Can we ask for a detailed account of what was paid etc, I cant believe they have left it this long. Thanks

sourcrates

Tax credit debts are are subject to the limitation act 1980, like any other simple contract debt (except income tax).
So if no repayments have been made in the last 6 years, then the debt is statute barred.

HMRC will be well aware of this fact, but do possess far reaching powers to collect old debts.

Write to HMRC stating that no repayment has been made in the last 6 years, therefore under section 5, limitation act 1980, this debt is statute barred.

They may still choose to recover it via any future award, or via your tax code, by deduction from your wages, but they cannot take you to court and make you pay.

She should also lodge an official complaint about the time it has taken them to instigate recovery action.