Tax credits cut - feeling desperate

Tinkywinks108 · 21 June 2018 at 6:05PM

I have just found out my tax credits have been cut drastically. I called HMRC yesterday and they told me it was because I didn't tell them that I started work in Jan 2017. I definitely remember that I did tell them, it was one of the first things I did when I got the job. In fact I have just found some letters from HMRC dated April 2017 that confirm my working hours and earnings.

The amount has been cut due to a lower entitlement and paying back the over-payment. I am now £70 per week worse off.

I have just tried to call them to talk to them about this and to at least see if I can get a better over payment plan. The lines are busy and I'm not even getting into the queue.

I'm feeling so desperate. As it was, my wages would last 2 weeks and then I would use up my overdraft to see me through to the end of the month. I literally can't afford to live on the new tax credit amounts. I'm the sole provider for my son. I am in housing association accommodation, my rent is £137 per week and I am not entitled to housing benefit. I don't know what to do.

I have used this website to get my utility bills down etc. There's nothing else I can do to budget except stop eating.

Will HMRC consider cutting down my over payments? Has anyone else experienced similar as this just doesn't seem right?

I feel like giving up.

Lemonadedrinker · 22 June 2018 at 8:54AM

I do feel for you I'm in kind of the same circumstances , I worked full time last year now I work 23 hours and with my wages and benefits I'm £80 a week worse off then I was last year. So I have to make big cuts and I have to constantly tell my self I may have alot less money but I less tired, my knees hurt me less ( need a full and a partial knee replacement) and I'm having more time with my child . It's not easy money wise ..you need to stay positive , sit down and fill in a SOA , the debt free forum on here are very very helpful so maybe do a SOA to get a full understanding of your incomings and outgoings and spending,At the moment I'm into batch cooking and not using my car for short journeys. That's benefited me .You can cope with this . Think positive and plan plan plan ...Things will get easier you just need get your head in the right place . Sorry that was long .hope it helps

pmlindyloo · 22 June 2018 at 9:02AM

Tinkywinks108 wrote: »

I have just found out my tax credits have been cut drastically. I called HMRC yesterday and they told me it was because I didn't tell them that I started work in Jan 2017. I definitely remember that I did tell them, it was one of the first things I did when I got the job. In fact I have just found some letters from HMRC dated April 2017 that confirm my working hours and earnings.

The amount has been cut due to a lower entitlement and paying back the over-payment. I am now £70 per week worse off.

I have just tried to call them to talk to them about this and to at least see if I can get a better over payment plan. The lines are busy and I'm not even getting into the queue.

I'm feeling so desperate. As it was, my wages would last 2 weeks and then I would use up my overdraft to see me through to the end of the month. I literally can't afford to live on the new tax credit amounts. I'm the sole provider for my son. I am in housing association accommodation, my rent is £137 per week and I am not entitled to housing benefit. I don't know what to do.

I have used this website to get my utility bills down etc. There's nothing else I can do to budget except stop eating.

Will HMRC consider cutting down my over payments? Has anyone else experienced similar as this just doesn't seem right?

I feel like giving up.

I was hoping that Darksparkle or another tax credits 'expert' would be along to help as tax credits is not my area of expertise.

I am not sure whether you have appealed the overpayment particularly since you say that you have a letter that shows your working hours and pay?

Without looking at your paperwork and payslips it is difficult to comment further.

CAB should be able to help as regards this overpayment so I would take all your paperwork, pay slips and bank statements to them. If they agree there is an overpayment they should be able to telephone tax credits and work out a repayment plan that you can afford.

Darksparkle · 22 June 2018 at 9:25AM

Firstly, what tax year is the overpayment for? I'm assuming 2017/18?

When you called in Jan 17 you'd have updated your income for the tax year 2016/17. Did you call in 2017/18 with an estimated income for that year as you'd have then worked for a full year, not just 3 months.

Tinkywinks108 · 24 June 2018 at 6:16PM

Lemonadedrinker wrote: »

I do feel for you I'm in kind of the same circumstances , I worked full time last year now I work 23 hours and with my wages and benefits I'm £80 a week worse off then I was last year. So I have to make big cuts and I have to constantly tell my self I may have alot less money but I less tired, my knees hurt me less ( need a full and a partial knee replacement) and I'm having more time with my child . It's not easy money wise ..you need to stay positive , sit down and fill in a SOA , the debt free forum on here are very very helpful so maybe do a SOA to get a full understanding of your incomings and outgoings and spending,At the moment I'm into batch cooking and not using my car for short journeys. That's benefited me .You can cope with this . Think positive and plan plan plan ...Things will get easier you just need get your head in the right place . Sorry that was long .hope it helps

Thank you. I already keep an account of my incomings and outgoings. I use this website to get cheapest utility and phone suppliers. The only unnecessary outgoings I have (and will now obviously stop) is Netflix (I have no tv licence) £6 pm, gym membership (£20pm) and my an after school activity my son goes to (£45 pm). I do have two cats but they're family and I can't get rid of them. I don't have a car. I do batch cook and shop at Morrisons and only buy cheapest products.

Tinkywinks108 · 24 June 2018 at 6:22PM

pmlindyloo wrote: »

I was hoping that Darksparkle or another tax credits 'expert' would be along to help as tax credits is not my area of expertise.

I am not sure whether you have appealed the overpayment particularly since you say that you have a letter that shows your working hours and pay?

Without looking at your paperwork and payslips it is difficult to comment further.

CAB should be able to help as regards this overpayment so I would take all your paperwork, pay slips and bank statements to them. If they agree there is an overpayment they should be able to telephone tax credits and work out a repayment plan that you can afford.

I have been trying to contact HMRC to tell them about the letters I found but have not been able to get through. The lines are so busy I don't even get placed in a queue. I hope to speak to someone next week. I will see what they say and then speak to CAB.

Tinkywinks108 · 24 June 2018 at 8:02PM

Darksparkle wrote: »

Firstly, what tax year is the overpayment for? I'm assuming 2017/18?

When you called in Jan 17 you'd have updated your income for the tax year 2016/17. Did you call in 2017/18 with an estimated income for that year as you'd have then worked for a full year, not just 3 months.

Please be understanding if any of the following makes me come across rather idiotic but I do find it very difficult to process numbers - probably the reason for getting into this mess in the first place. I'm doing my best to understand what has happened here but have little understanding of how this kind of thing works.

These are the letters I have:

Provisional tax credits statement, dated April 17 for period 04/16 - 04/17. This states my job start date (05/01/17) and my working hours per week and amount earned. Amount shown is a bit higher (£425) than what I earned, I'm presuming because tax letter shows gross income?

Provisional tax credits statement, dated April 17 for period 04/17 - 04/18. Correct working hours per week shown. But then it states my (correct) earnings for 16/17 (as above) only for some reason.

Final tax credits decision, dated August 17, for period 04/16 - 04/17. Again, correct working hours. States income for 16/17 higher than it is (about £3k more!). I have no idea why. Obviously I missed this.

Tax credits award dated August 17, for period 04/17 - 04/18. Correct working hours. States income from 16/17 again (why? shouldn't it be 17/18?) as the higher amount (3k more) again.

Amended tax credits award, dated May 2018, for period 04/17 - 0/18. Correct working hours. Income for 17/18 shown about right (about 1k higher which I presume because it's gross income). Income for 16/17 shows the 3k higher amount again.

So the only discrepancy I can see is the 16/17 earnings amount which is too high. Is this where the problem lies?

Around the time of December 2017 my wages were about £300 lower due to being off sick. (Had an operation and recovery was longer than my sick leave entitlement.) I didn't inform HMRC at the time. I guess I should have done? Would this make much difference to tax credits?

Darksparkle · 24 June 2018 at 8:27PM

What income did you have before starting work in Jan17?

Its hard to comment without the exact figures but it doesn't sound like you provided an estimate for the 2017/18 income. You wouldn't have been able to do that in Jan 17 because the tax year didn't start until April 17.

Tinkywinks108 · 24 June 2018 at 10:38PM

Darksparkle wrote: »

What income did you have before starting work in Jan17?

Its hard to comment without the exact figures but it doesn't sound like you provided an estimate for the 2017/18 income. You wouldn't have been able to do that in Jan 17 because the tax year didn't start until April 17.

I was unemployed and claiming ESA benefit before I started work in Jan 17. I don't really understand, I told HMRC when I started work. They send a tax renewal every year and I would have then told them, yes, the details are correct, I am still working.

Darksparkle · 25 June 2018 at 6:06AM

Tinkywinks108 wrote: »

I was unemployed and claiming ESA benefit before I started work in Jan 17. I don't really understand, I told HMRC when I started work. They send a tax renewal every year and I would have then told them, yes, the details are correct, I am still working.

Was the esa contributions based? That might account for the additional £3k you mention.

It's not just about telling them you work, you also need to tell them what you earn. Tax credits aren't based on your hourly rate but on your income for the tax year.

When you called In Jan 17 you'd have told them what you expected to earn in the 2016/17 tax year which would have been 3 months wages. Then in April 2017 the 2017/18 tax year started and you'd have worked for the full year so your income would have been higher. It doesn't sound like you updated your 2017/18 income.

Tax credits cut - feeling desperate

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