Tax credit overpayment help

alwayslookintosave

peteuk said:

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 it’s 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.

That seems mad doesn’t it, it says I was paid £1667.20 until 25/9/23 but my income up until 01/2/24 meant that it should have been £879.90 so they recovered £852.39 which has left an outstanding balance of £1639.89 overpayment..I have no idea where that figure has come from..I asked and they sent a letter with the same information. Even if they do use the income up until feb I still don’t get it, I’ve tried asking them to explain it but they don’t seem to get it either and the lardons letter just had the same figures on it. I had no previous overpayments outstanding 

alwayslookintosave

Yamor said:

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.

It was the end award review 

Yamor

There is something weird going on here.

Are you able to post up an anonymised copy of the tax credits letter?

alwayslookintosave

Yamor said:

There is something weird going on here.

Are you able to post up an anonymised copy of the tax credits letter?

Yes absolutely, I will do that in the morning, can I post a picture on here?

Yamor

alwayslookintosave said:

Yamor said:

There is something weird going on here.

Are you able to post up an anonymised copy of the tax credits letter?

Yes absolutely, I will do that in the morning, can I post a picture on here?

Yes, you should be able to.

Icequeen1

peteuk said:

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)

This is not correct. The process for working out income and finalising a tax credit claim when moving to UC uses a different process to the usual end of year process which is what you are describing. 

sheramber

Details of how Tac Credits should be finalised when tac credits ceased then a gap until UC claimed. 

https://www.litrg.org.uk/benefits/moving-universal-credit/ending-tax-credits

scroll down to 

In-year finalisation process

For people who make a claim for universal credit, HMRC have a separate process called ‘in-year finalisation’. It is slightly different to the usual end of year process because it calculates tax credit entitlement for a part-year and uses part-year income figures. You can read more about how income is calculated on our in-year finalisation page.

………………

And the rest

alwayslookintosave

Attached.xx

peteuk

Icequeen1 said:

peteuk said:

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)

This is not correct. The process for working out income and finalising a tax credit claim when moving to UC uses a different process to the usual end of year process which is what you are describing. 

Does the highlighted not suggest that at the point of claiming UC, they calculate you TC (Hence using Apr-Feb Income) over the first sentence that states its recalculated at the end of the financial year, so had the OP not claimed UC it would have still been recalculated in April.  

I haven’t suggested how, just the why.

Yamor

alwayslookintosave said:

Attached.xx

Thanks.

This certainly looks to be an error.

However, I'm still not sure it it is this which has caused the overpayment.

Can you post up page 2 (anonymised).

And what was your total household income for 22/23?

Has your income this year (23/24) been earned in equal amounts each month (i.e., £2,961.70 gross per month)?