Confused about old WTC (supposed) overpayments

pkwpkw1

I recently got awarded UC and on my first statement, I saw tax credits debt being collected, no notification or explanation beforehand. I went to the DWP debt management portal to check what I owed, and I saw 2 amounts going back to 2015 and 2022.

Now, an overpayment was something I was disputing earlier but I was never told clearly what the final outcome was, and the communication with the HMRC was confusing to say the least. I will try to describe the timeline as best I can based on the records I have:

2013 - Claim start
The claim is classed as manual calculation, and award notices received by post would often show different amounts to what I was paid, as well as overpayments, something the HMRC told me themselves when I queried it

2017 - Final tax credits notice showing amount owed 0, but I receive a separate letter that I owe 550.80. After several calls to HMRC helpline to confirm whether was an overpayment or not, I am told "we can't see any overpayment". I follow it up with a letter requesting confirmation in writing. I receive a letter "We've made a decision about your overpayment" which states "I can confirm there is no outstanding overpayment."

2022 - I decide to close my claim. I receive confirmation that I have withdrawn from tax credits. In the calculation on the back, of the letter, it says amount owed 0.

2022 - I receive further 2 letters stating I owe 550.80. I send a letter to HMRC mentioning the previous letter from 2017 and disputing the overpayment. I never hear anything back.

2025 - I check DWP debt and it shows I owe 636 for the award ended Feb 2015 (strange date?), and 275 for 2022 (???). I send another dispute message online, summarising the above. Not hearing anything within the stated 15 days, I call them up and am told overpayment is there and the letter from 2017 related only to year 2016-17. But they can't tell me the amounts. I feel fobbed off and none the wiser.

I'd be grateful if anyone can advise on the course of action here? Tbh it feels like fighting a system that "knows better", even though I have all the award letters, but what do they amount to if the figures don't match what's on their system? I'm totally confused.

peteuk

My advice is would be to call the TC debt helpline they should be able to advise you where the overpayment occured and why.

So TC is based on an approximate income, at the start of the tax year you advise them of your expected income and they then work out the amount you are due.  At the end of the tax year, they then take the actual amount and recalculate your TC.  So if you have a wage raise in the tax year, it may be more than you expected.  

Now for me, if you then dont update that amount it didn’t automatically update. Eg in 2002 i estimated my wage to be £16K but actually was paid £18K, the following year would not automatically change the estimated amount to £18K.

At the end of the year, you will get a summary of the recalculated payment, it doesnt show previous overpayments.  Hence when you closed your claim in 2017 it may have shown 0 owed, but that would be for 2017 only.

It seems by your own post you knew about the overpayments, if you still have the letter that clearly states we’ve looked at your overpayment and there is none, it would have to relate to the £550.80, and not the year in which it was produced. 

I may be wrong, but disputing this on your UC portal is the wrong thing to do, as they have no control ver it, apart from the payment back.  You will need to contact the debt team, I would also say that your are highly likely to be told your period to question this is closed. 

Parts of this is a familiar tale to me, advised no overpayment, but then sent a letter stating theres an overpayment.  Our overpayment was there computer issue, but as always with HMRC/DWP they fall back to you should have read and understood the award and notified us of any changes (which I did, but didn’t notice the issue) therefore my outstanding payment was ruled as owed.  Currently paying off £25 a month of over a £1K overpayment….

Good luck. 

Newcad

It is something that we have seen quite a bit of.

HMRC did not always chase Tax Credits overpayments. There were various reasons why not.

However once Tax Credits were migrated to UC the DWP took over responsibility from HMRC - and the DWP 'Debt Management' do chase any and all as yet unpaid TC overpayments.

Some people were not even aware that they'd had a TC overpayment; until they migrated to UC and Debt Management started to recover it.

As you do say that you were aware of at least one (alleged) TC overpayment, and have never previously paid anything back, it looks that there was an overpayment outstanding but HMRC were not chasing it.

However DWP Debt Management have chased it, and have told UC to apply the deduction to your UC payments to recover the overpayment.

I'm afraid that if you still want to dispute the overpayment then you will now have to do that with the DWP Debt Management, (not with UC, they are just doing what Debt Management has told them to do).
It's unlikely that Debt Management will have access to records of any previous dispute you had raised with HMRC. (Or at least they will tell you that they can't get them, and they won't try to).

https://www.stepchange.org/debt-info/tax-credit-overpayments.aspx

pkwpkw1

Thank you both. Just to clarify, I disputed it via the HMRC portal and the helpline, not the UC. I think all I can do now is write another letter asking for a detailed breakdown of the overpayment and take it from there.

peteuk

pkwpkw1 said:

Thank you both. Just to clarify, I disputed it via the HMRC portal and the helpline, not the UC. I think all I can do now is write another letter asking for a detailed breakdown of the overpayment and take it from there.

That wont solve the issue, you will need to phone the debt line.  They will be able to put a hold on payments, advise you where/when/why its occured.