HMRC 'Over payments'

McClane54

Hello everyone,

Some advice please? My wife has been a stay at home mum for the last 6 years and we were able to claim the correct amount of benifts were were entitled to....

In April 2022 we were claiming what we were entitled to, then in the September 2022 my wife went back to work, so we contact the HMRC online and gave them the date she started , and the benifits were stopped straight away! Great - we done evrything correctly !!

Now today, we have had a letter to say we were overpaid for the April 2022-2023 period and owe 2k !! Now, at the time we were claiming April 2022 to sept 2023 things were fine, my wife wasn't working and we were entitled to what we got. So why do we owe anything? in that period she wasn't working???

Any help or advice would be great

calcotti

If you are referring to Tax Credits these are calculated on an annual basis so well have hard an overpayment.

McClane54

Yes, Tax credits ! but I never claimed when she was working, only when she wasn't.

calcotti

McClane54 said:

Yes, Tax credits ! but I never claimed when she was working, only when she wasn't.

It doesn't matter - it's a benefit calculated on an annual basis.

strawb_shortcake

I'm  in the same position. I have an overpayment for last year, my award in April was based on the expected salary for the year. In July I received a larger than anticipated pay increase. This meant that from April to July I'd received too much based on my salary. 

You should have received a letter when your tax credits stopped to say you'd had an overpayment, so this shouldn't (in theory) be unexpected. They have written to me again in April to reiterate the overpayment. I'm just waiting for them to finalise last year's claim so I can pay it back. 

peteuk

Always good to see that Tax Credit hasn't changed! 

Its so simple yet they manage to mess it up.  You tell them what you think youll earn, they work out how much they pay you (in 12 monthly payments) at the end of the year you tell them how much you actually earnt and they rework the figures.   So in theory you can claim for 6 months and then have to pay it all back when a claimant goes back to work, depending on their salary. 

Overpayments are usually taken from the next years claim  so if you owe £1200 each payment for the next year would be £100 less.  But if you don't claim the debt is still owed ( and is not time barred) so I would speak to them ask for a payment plan and be realistic about it.  If you don't it will be passed on and the DWP can take it form your wage.  Oh and if it is passed on they will split the amount in two (joint claim) and claim it from you both. 

sheramber

McClane54 said:

Yes, Tax credits ! but I never claimed when she was working, only when she wasn't.

your initial payments were calculated on your pay alone as the potential annual income.

When your wife started working your potential combined annual income increased.

Tax credits are calculated on your joint annual income form April to April although your wife only started to work in September.

Her income from September increased your  joint annual income which resulted in an overpayment.

McClane54

Ok I understand. Thank you. Shame we didn't have a crystal ball when claiming from April 2022 to say that she would start work in september hay! haha

How much do I have to pay back monthly? during these tight times there's not much room for more payments to go out

poppy12345

McClane54 said:

How much do I have to pay back monthly? during these tight times there's not much room for more payments to go out

You will need to contact them to arrange a payment plan. 

peteuk

McClane54 said:

Ok I understand. Thank you. Shame we didn't have a crystal ball when claiming from April 2022 to say that she would start work in september hay! haha

How much do I have to pay back monthly? during these tight times there's not much room for more payments to go out

Im paying back £2k at £25 a month…