Tax credit overpayment help

alwayslookintosave

Wondered if someone could shed any light please…
situation…
stopped claiming as single parent in sept 23. 

Tax credits stopped.
single again feb 24
Applied for UC
in year finalisation done for tax credits but they used my income from April 23 to feb 24 instead of April 23 to sept 23. Is that right? As my award period was from April 23 to sept 23. I didn’t claim anything from sept to feb so why are they using my income up until the day before I applied for UC? Now they say due to this I owe a large overpayment. I though my the income amount used would be from April 23 to the day my tax credit claim ended?
Ive now cancelled my UC claim through fear of being overpaid!!

Icequeen1

No that isn't correct. Assuming you claimed UC in the same tax year as your tax credit claim ended then they should use the part year income from 6 April to the date your tax credits terminated. You will need to appeal the decision if they have done that incorrectly and might need a welfare rights specialist to help with the dates - you only have a short period to appeal from the final award notice date so make sure you put that in as soon as possible. 

Yamor

Are you sure you have the reason for the overpayment correct?

What is the end date of tax credits as stated on the in year finalisation paperwork?

Either way, cancelling your UC claim has no relevance, and wouldn't help in any way.

poppy12345

alwayslookintosave said:

Ive now cancelled my UC claim through fear of being overpaid!!

This is one good thing about UC because entitlement is based on earnings received each month then there's much less chance of you being overpaid. 

sheramber

alwayslookintosave said:

Wondered if someone could shed any light please…
situation…
stopped claiming as single parent in sept 23. 

Tax credits stopped.
single again feb 24
Applied for UC
in year finalisation done for tax credits but they used my income from April 23 to feb 24 instead of April 23 to sept 23. Is that right? As my award period was from April 23 to sept 23. I didn’t claim anything from sept to feb so why are they using my income up until the day before I applied for UC? Now they say due to this I owe a large overpayment. I though my the income amount used would be from April 23 to the day my tax credit claim ended?
Ive now cancelled my UC claim through fear of being overpaid!!

alwayslookintosave said:

Wondered if someone could shed any light please…
situation…
stopped claiming as single parent in sept 23. 

Tax credits stopped.
single again feb 24
Applied for UC
in year finalisation done for tax credits but they used my income from April 23 to feb 24 instead of April 23 to sept 23. Is that right? As my award period was from April 23 to sept 23. I didn’t claim anything from sept to feb so why are they using my income up until the day before I applied for UC? Now they say due to this I owe a large overpayment. I though my the income amount used would be from April 23 to the day my tax credit claim ended?
Ive now cancelled my UC claim through fear of being overpaid!!

Did you get a form to complete with your income details to September 2023?

peteuk

alwayslookintosave said:

Wondered if someone could shed any light please…
situation…
stopped claiming as single parent in sept 23. 

Tax credits stopped.
single again feb 24
Applied for UC
in year finalisation done for tax credits but they used my income from April 23 to feb 24 instead of April 23 to sept 23. Is that right? As my award period was from April 23 to sept 23. I didn’t claim anything from sept to feb so why are they using my income up until the day before I applied for UC? Now they say due to this I owe a large overpayment. I though my the income amount used would be from April 23 to the day my tax credit claim ended?
Ive now cancelled my UC claim through fear of being overpaid!!

Tax credits is always recalculated at the end of the financial year, you payments from April 23 - Sept 23 was the amount for the whole year divided by 13 (paid ever 4 weeks).  

I assume you stopped as you moved in with someone but then became single in Feb 24 at which point you couldnt register for a new TC claim and so had to go through UC.

At this point they would have recalculated your TC and with the new amount taken away what they have paid you and so hence the overpayment.   This will then be claimed back through your UC claim, although it might be worth speaking to them to see if you can get the repayment amount reduced (but paid over a longer period)

alwayslookintosave

Thanks for all your replies. In the end of tax credit claim letter it states the claim ended on 24th september, But the income they have used is from April until feb (the day before I applied for universal credit). I have tried to appeal as between September and feb I claimed nothing so why are they using that time as part of my income? Surely the income used should be April until 24th September? I just don’t seem to be getting anywhere 😔
the reason for the overpayment is due to my income (because they’ve used 10 months income for 6 months of tax credits) so there’s bound to be an overpayment. I really don’t understand it! Basically there saying nearly the whole amount I received was an overpayment due to this income.

alwayslookintosave

Yamor said:

Are you sure you have the reason for the overpayment correct?

What is the end date of tax credits as stated on the in year finalisation paperwork?

Either way, cancelling your UC claim has no relevance, and wouldn't help in any way.

The end date is 24/9/23 and the income used is up to 05/02/24

alwayslookintosave

sheramber said:

Did you get a form to complete with your income details to September 2023?

No, I didn’t get one, I have given them my income up until September 2023 though but they still used income up until feb, the day before the UC application 

peteuk

alwayslookintosave said:

Thanks for all your replies. In the end of tax credit claim letter it states the claim ended on 24th september, But the income they have used is from April until feb (the day before I applied for universal credit). I have tried to appeal as between September and feb I claimed nothing so why are they using that time as part of my income? Surely the income used should be April until 24th September? I just don’t seem to be getting anywhere 😔
the reason for the overpayment is due to my income (because they’ve used 10 months income for 6 months of tax credits) so there’s bound to be an overpayment. I really don’t understand it! Basically there saying nearly the whole amount I received was an overpayment due to this income.

As stated above your TC is calculated on a period of that year and then paid in 13 payments (every 4 weeks).  Where as UC is calculated on a monthly period.  So yes your Income for TC is April till Feb and had you not claimed UC it would have been recalculated in April at the end of the tax year.  

Because you've been given approx 6/13 off your total payment, if your income now says your yearly TC was zero, everything youve been paid is an overpayment.  It’s a very flawed system, hence one of the reasons for the move over to UC.

With UC its calculated for that month assessment period, so unless you've lied on the application or fail to advise them of any relevant changes then the mass claw back of overpayment is less likely.

Yamor

What sort of letter did you receive from HMRC with this information?

I suspect it isn't the finalisation letter, but rather a regular amended award letter.
Is there yellow colouring on the first page?

If it is a regular amended award notice then they are SUPPOSED to use the full year's income despite tax credits having ended in the middle of the year. The taper is still pro-rated though.