HMRC demanding £14,000 repayment from a rebate

orangesun

Hi all,

Nightmare situation. In 2020 I filed a self-assessment, and the following year I was given a rebate of £10,000. I used it almost immediately, on urgent private surgery that I would have had to wait 5 years for on NHS (for stage 4 endometriosis).

In 2023, I randomly received a letter from HMRC stating that they had made an error in calculations and that I actually owe the full amount back, plus about £3k on top. 

The really hard bit is that the surgery didn't go well and I have been out of work since, due to post-op complications. Prior to that, I was on a really great salary with a tech company (truly at the top of my game!), but now I am on universal credit. I cannot afford to pay the rebate back, and it is accumulating interest, now somewhere around £15,000?

What are my options? They have said they will not ask for a payment plan as my outgoings are more than my incomings, but the will keep accumulating interest until its paid off. Who knows when that will be. I am starting a part time job soon too and scared they are going to take it all, and I'll be worse off than when I'm not working and on UC.

Struggling with speaking to CAB or StepChange, due to my new disabilities, I can't really make sense of much anymore unless it's written in places like this that aren't overwhelming!

Appreciate any thoughts. 

Bookworm105

HMRC never collect more than 50% of your net income towards your arrears
you need to remain in contact with HMRC and arrange a payment plan when you are in a position to do so, don't ignore it. 

this may help 
Fact Sheet - Income tax debt | Tax debt advice | Business Debtline | Business Debtline

TheSpectator

Did you file the Tax Return yourself?

Online or paper? If Online then there was no mistake by HMRC.

Where you expecting a substantial refund? If not, why didn't you query the £10,000 repayment?

Grumpy_chap

orangesun said:

In 2023, I randomly received a letter from HMRC stating that they had made an error in calculations and that I actually owe the full amount back, plus about £3k on top. 

Have you verified that this letter is genuine and from HMRC?

DRS1

Do you have an online account with HMRC?  If so you can log in and check if that says you owe them any tax.  At least then you will know if the letter is a scam.

orangesun

I queried the rebate twice, and they said no mistake. 

I also queried the refund, they said I'd missed some work benefits amounting to that figure. I never managed to source a P60 from my ex employer (ignoring me) to double check. I filled it in online.

I wonder if an accountant could help me retrieve and review the paperwork. I'm VERY bad with numbers with this cognitive decline.

TheSpectator

orangesun said:

I queried the rebate twice, and they said no mistake. 

I also queried the refund, they said I'd missed some work benefits amounting to that figure. I never managed to source a P60 from my ex employer (ignoring me) to double check. I filled it in online.

I wonder if an accountant could help me retrieve and review the paperwork. I'm VERY bad with numbers with this cognitive decline.

So you missed out what must have been a large source of employment income/benefit and in your op you say HMRC made an error in the calculation, no you made the error.

Sounds like HMRC made an enquiry into that Tax Return resulting in the money being recovered. However there are deadlines by which they must do this although other options remain open.

Does sound like you need some professional help. 

orangesun

There's no way my benefits amounted to 10k but sure. I'll get some kind of professional in to figure it out.