Mumsnet has not checked the knowledge, experience or professional qualifications of anyone posting on Mumsnet Talk and cannot be held responsible for any advice given on the site. If you have any serious legal concerns, we would suggest you consult a lawyer.

Tax credits stopped and asked to pay back for 2 years

(167 Posts)
Hopingtobehappy Tue 26-Mar-13 13:25:25

I dont know whether this is in the right place.

I am separated from H and have been for 18 months.

We run a business together still, address for the business is where I live.

Tax credits 'investigated' my single claim and they have written to us now sayingthat they have closed the claim and that I have to pay back £10K

I have not been given any chance to prove that H does not live here, they say that they have checked and that there are numerous 'association' with my address and that is sufficient doubt over my single claim.

Of course there are numerous associations! we run a business together! we have 2 joint mortgages and we have 2 children! what do they expect?

I am in a bit of a mess as payments have stopped altogether. Even when we were a couple we still had a claim jointly and even that minimum amount would have helped.

TomDudgeon Fri 29-Mar-13 11:47:41

I think what the op is saying is

When they were a couple (with the same incomes) they or tax credits

They spilt so she applied for single persons tax credits

The tax credits people don't believe they've spilt because of all the joint finances (whether that's fair isn't te point right now)

So if tax credits think they're still a couple (on the same wages) why have they completely stopped the credits rather than what they were paying in the first bit, when they were still a couple.

Because any amount the tax credit people think they are entitled to as a couple, will be apportioned against the alleged overpayments.

If they think you have been overpaid they take it back from any remaining entitlement. Thus your payments can disappear completely even though you are still entitled to something.

When off sick recently I saw a prog about the dept in tax credits that deals with investigations. It's scary what they can get legal access to. Your bank statements for a start, utilities etc. if you were doing a routine check on a family saying they have splitbut not divorced yet, and see that they bought a house I joint names AFTER the date they claim to have split, you'd think it odd.

Hopingtobehappy Fri 29-Mar-13 13:14:33

Tom thats exactly what I am saying.

Flibberty, if we are still a 'couple' as they say, I would still be entitled to tax credits though and if they have overpaid me then those overpayments would come out of what they should be paying now, but that isnt what they are saying, they are saying the have overpaid me and that I have to pay back all overpayments, and that I am entitled to NOTHING.

I really dont care what they have access to to be honest, I have nothing to hide, although I think its a bit cheeky! what I am not happy about is that they seem to change the goalposts to what suits them (not even HMRC itself, they do not seem to have any set rules)

I have never applied for single persons tax credits, they told ME that I had to claim as a single person when I told them that we had split (I rang and told them because a friend told me that you can use the date that you tell tax credits for your divorce after 2 years separation) they KNEW that my H still lived there and continued to do so for 6 MONTHS after we separated. DUring that time we found him somewhere to live (and in fact I think I mentioned to tax credits that he would be moving out when we had bought him a house!!

Had anyone told me at any point that the problems that this would have caused I wouldnt have even bothered to tell them that we had split!

RedHelenB Fri 29-Mar-13 13:24:26

On a combined income of £35,000 I can't see how you got anything as a couple either.

RedHelenB Fri 29-Mar-13 13:27:29

The key thing is - are you paying mortgage, bills & getting maintenance paid into YOUR account.

The upper limits were cut from April 2012. For a family with 2 children I think the upper limit of earnings is now about £35k so it's very likely that you would have been entitled last time you claimed as a family but not now.

Did you ring up the tax credits and say that you are separated? Something must have prompted them to tell you to claim as a single person.

I am quite sure you have done everything honestly, and done some of the things on the advice of an accountant, who unfortunately may not be aware of how you must do things for tax credits purposes.

Hopingtobehappy Fri 29-Mar-13 13:57:59

When we separated a friend advised me to make a record of it somewhere so that we could divorce after 2 years, she told me that she had been able to use HMRC tax credits, so I rang and told them that we were separated, I told them at that point that H was still living with me and that we had no date at that time for him to move out. THEY TOLD ME that I had to claim as a single person because I had told them I was separated. I asked them if they were sue about that as we were still living together and therefore NOTHING had changed apart from that our relationship had ended. THEY insisted that I could no longer have a joint claim because I had told them we were separated.

AT THAT POINT they asked me whether the money would go into a joint account, which I said it would, and would that be a problem, as that was where all the bills came out of. THEY said that was fine as long as I knew that it was ME taking the risk that H could access the money. AT NO POINT did they say that I should change that to a sole account.

As I said, HMRC seem to make things up as they go along. They told me things that were obviously not right? how I am supposed to know what is right or not if they dont?

Nobody ever told me it was important to separate our finances. H moved out in June last year and we both struggled to work, look after the kids, keep things normal, I was ill and he had a major op last year, had we known that changing banks accounts, bills etc. were a priority over trying to move on with our lives, we might have done something about it.

I fully understand that HMRC needs to investigate these things, but I feel completely out of control here, I have done nothing wrong, and in fact I thought that we were doing MORE than we could have - i.e. saving taxpayers money on HB that I would have been entitled to had I moved into rented.

My Accountant told me that they could help, when I broke down in tears at a meeting there at the end of last year, they deal with HMRC on a daily basis, so I trusted them to do a better job than I could, especially given that I was struggling to even work at that time.

I have been a taxpayer for 25 years, I might as well give up work altogether, because if I have to pay back everything that TC have paid us in the last two years, I can certainly wipe out a year of earnings after tax, if not more. They can take a running jump!

RedHelenB Fri 29-Mar-13 14:30:29

Separating means just that - separating your lives.& tbh when a relationship breaks down one or other of the partnership if not both are very keen to do so! By 18 months you would expect a single claimant to have their own bank account, be getting maintenance, paying their own council tax etc etc.

Hopingtobehappy Fri 29-Mar-13 15:00:55

Are you separated RedHelenB?

Because my relationship with my ex is nothing like that. Aside from working together every day, we have two children who come first for both of us, that means we still do a lot of things together.

I explained everything in the post above, I didnt realise that there were 'set rules' about how to separate. Perhaps someone whould write a book for us all to follow to make sure we all get it right :-)

RedHelenB Fri 29-Mar-13 15:43:24

No the clue is in the word SEPARATE. Does sound as though you may not be hence why tax credits have ruled the way they have. I take it that he's not paying you any maintenance then?

SofiaAmes Fri 29-Mar-13 15:47:04

I had a fight over tax credits some years ago. It wasn't very much and they were insisting that I pay them back. I sent them half a dozen letters saying pretty much the same thing over and over again. I think they finally read the last letter and agreed that I was correct. Just keep persevering.

Hopingtobehappy Fri 29-Mar-13 15:59:13

RedHelenB, thank you for coming to the conclusion that we are not separated, the kids will be pleased to hear that, I will let them know :-)

I had also better let the bloke that I am on a date with tonight know as well, he might not be too happy !

Hopingtobehappy Fri 29-Mar-13 16:00:48

Thanks Sofia, I will try not to get too worried about it:-)

If I have been overpaid I will fight this, there is no way that I can just pay it back anyway.

PollyEthelEileen Fri 29-Mar-13 16:19:42

I am still amazed that's couple, whether sexually active together or not, can expect to take out a second mortgage while on tax credits.

Surely tax credits mean you can't make ends meet on a more basic level, not something you use for capital investments, however worthy in you eyes?

IneedAsockamnesty Fri 29-Mar-13 16:34:23

Tax credits cannot legally claw back a over payment on a single claim from a joint claim or on a joint claim from a single.

Op any chance you can get a separation agreement?

Floggingmolly Fri 29-Mar-13 16:35:10

You have two joint mortgages; why should you expect tax credits to help you fund them?

FiveGoMadInDorset Fri 29-Mar-13 16:41:04

I am confused as to why they will only speak to your accountant. Do they sign the form for you and send it in? I sign the form send it in with last years accounts, accountant fills in figures and sends it off and then any communications come to me and I phone them.

Hopingtobehappy Fri 29-Mar-13 16:50:45

Its my accountant who has told me not to speak to them, as they are now dealing with it.

I am still amazed that people seem to have a problem with me having a mortgage? lots of people have mortgages whilst on tax credits? is this a new thing that only people in rented can claim? also did you miss the part where I said I would be able to claim HB if I went into rented? from a taxpayers, I would have thought that would be a good thing.

Also, I have never EXPECTED tax credits to help me fund anything, I rang and told them my situation, they paid me the money, should I have suggested that they didnt, because I have (2) mortgage(s) ?

FiveGoMadInDorset Fri 29-Mar-13 16:53:35

I think the issue with the mortgage is that you are on your ex's new one and that could be where the problem is.

PollyEthelEileen Fri 29-Mar-13 16:58:51

A second mortgage, funded by tax credits, is taking the piss, surely? You only need one roof over your head.

Hopingtobehappy Fri 29-Mar-13 17:16:03

Polly have you read the thread? I dont live in two houses!

They are not funded by tax credits either, we both work and we both earn. As I have pointed out several times, if I had moved out and rented I would be entitled to HB, now thats taking the piss in my eyes, which is why we didnt do it !

PollyEthelEileen Fri 29-Mar-13 17:22:14

Well, no one can actually live in two houses of any one day, can they? But that doesn't stop people buying more than one as an investment. This is fine if they can do so under their own steam, but not if they need help from honest, hardworking taxpayers.

If you can afford two mortgages, why do you need benefits?

Wereonourway Fri 29-Mar-13 17:47:10

I think people are being a wee but harsh on the op here.

She is obviously being very transparent here and has been with hmrc. Whilst their seperation may not be a typical agreement the other side of the coin is this- had they separated and her ex rented he could pay her 10grand a month in maintenace payments if they wanted- tax credits do not count maintenace as income.

Their expenditure, although linked to quite a degree, does sound quite normal. At no point will hmrc request info about anything other than income, and their questions are fairly probing. Outgoings are not discussed at all.
And they will check with taxes department to ensure actual figures were reported correctly.

I have limited inside knowledge of tax credits. You can request that they listen to the call you made which will check the info the advisor gave you.

I genuinely don't know whether the compliance team would reverse their decision or whether a joint claim could be made in retrospect- persevere op, even if they enforce the overpayment this has to be done at a rate at which you can afford- they will issue and income and expenditure form to determine this afaik.

IneedAsockamnesty Fri 29-Mar-13 17:59:48

If the op makes a joint claim she is breaking the law and committing fraud unless she intends to get back together with her ex and does so.

IneedAsockamnesty Fri 29-Mar-13 18:01:28

And if she did ask for a joint claim with ANY backdate it would be considered as evidence of an actual previous fraud.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now