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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.

Drivingmecrazy1 Tue 30-Apr-13 13:18:16

Hi I too am having similar problems with this, my xp and I had a joint claim until Feb 2012 when we split up, opened a single bank account and moved into my mothers house ( which might seem strange but she is disabled and he is the named driver on her car so he needed to be whithin 3 miles of her house). Anyhow I got a phone call from tc in Preston in January of this year asking why I had not contacted them about the letter they sent me I didn't get any letter n told them this, it was then they informed me they where investigating my single claim status and I was asked send proof that my xp was not living at the same address. I asked what info they needed and sent a copy of his driving licence and a letter from his dentist which they said in a letter to me they didn't receive I offered to send them letters from my xp and my mum and other people and was told they couldn't accept this as it is third party info and could be written by anyone. I asked them about the info they had and they said my xp opened a bank account in February 2012 in my address I explained that because he had no proof of address at the time of openining account he had to use previous 1 and the other aspect they had was voters role I asked how this was possible as only me and my som where on the voters role when they checked the date of birth it was my sons. I asked again what info they held and was told in no uncertain terms that they could not give me info as that would breech the other persons financial data act. All the bills are in my name and I sent a copy of bank statements for the year they are querying and a copy of electricity bill, tv licence, and his wage slip, dentist letter, and driving licence again. They have now informed me I need to repay £1414 for 2011-2012 and £8544 for 2012-2013. I am completely stumped as I am now on ESA as I have a serious heart condition and had an ICD fitted last year. Any help would be much appreciated

IneedAsockamnesty Tue 02-Apr-13 18:23:00

You can invite them round its unlikely they will but one client of mine did and they did come.

In all fairness they thought her kids didnt live with her as her abusive ex ( who didnt even have contact) told them that. So a bit of a different situation.

Hopingtobehappy Tue 02-Apr-13 18:06:45

Thanks sock.

I actually would prefer them to just come round and visit, they can ask what they like.

I am usually a bit of a pit bull as well, but I lost a lot of confidence and when I was ill struggled with everything. If it wasnt for them asking for so much back they could keep their stupid tax credits and I would just manage, but there is no way that I can pay that sort of amount back.

IneedAsockamnesty Tue 02-Apr-13 17:34:18

There is not such a new rule.

Only a change in the main way they do most investigations. Now they have not changed the rules with regard to the investigations so what they are allowed to ask about and request you provide are the same its just changed how they mainly do them.

They have a computer system that picks out claimants who are in high risk of committing fraud groups I'm guessing you fit into two groups in perticular ( 26+ lone parent female and self employed low income) this computer randomly spits out people to investigate as routine. This has always been the case and they investigate a certain % of these claimants every year some end up on the list every year for about 5 years.

At the same time another computer looks at other info things like credit checks electoral roll and other such things your name has been spat out as showing another adult looking like he lives with you.

Chances are you were on both lists.

Now if this had happened 7 years ago you would have been asked to provide a list of certain things and received a home visit from two staff members from a horrible office in Preston. These people would have turned up asked you shit loads of questions used observations from inside your home and gone away and decided what they thought any more questions would have been directly asked and further evidence requested a decision would then have been made.

Unfortunately about 5/6 years ago it switched to Belfast, and as a result the vast majority of investigations are done almost completely via computer ( co incidently the investigations now cost more and find less fraud apart from when dealing with people who have no idea what they are supposed to do and who usually aren't actually committing any) what used to be used to raise flags and launch a full investigation or surveillance and what not now is often relied on as a full investigation.

Often this can pick easy obvious cases out very quickly and effectively but these cases would have been detected just as quickly the old way and any evidence would have been stronger ect but it also picks out cases such as yours that need further questions asking ( understandably) but actually no fraud is happening the old way would have discovered this with less of a cost to the tax payer and less stress to the claimant.

If I were you under the same circumstances I would besiege them with every bit of evidence I could possibly locate that proved my singleness if that didn't work I would go to tribunal then if that didn't work I would force them to take criminal action against me.knowing that the burden of evidence in criminal stuff is higher than civil but then again I'm a bloody minded pit bull grin

Hopingtobehappy Tue 02-Apr-13 15:15:53

I can easily prove all of these things so I am now much less worried. The main worries for me before is this 'definition' of separated, I know that we obviously are, but if there was this sudden new rule thta you werent really separated if you have a joint mortgage and joint accounts then that would be where the problem was.

I could get statements from both my kids schools, neighbours, accountants, plus council tax bills and some other bills that have since been changed. Also the other Directors in our business plus employees.

Xenia Tue 02-Apr-13 15:09:14

Yes, so all the proof you can get - signed statements from his work, your neighbours, his electoral roll and council tax statements showing his new address, a whole wodge of paperwork attached which proves his connection to the new address would help. You might even get a statement from your accountant who might get struck off if they lied, saying you split up and when. Loads of documentary evidence - both email and post it by special delivery with a short very clear letter and question about the appeal process.

EggwiniasRevenge Tue 02-Apr-13 14:28:58

I agree with sock.

I phoned them when I knew the date xp was moving out.

They told me they wanted the date that we were no longer partners. I distinctly remember because I had to think back to the date that I found tge stash of valentines trash for his other woman.

I believe that this is correct. It is the date you stopped being a couple.

The problem is that they think that you have never seperated. Not that he stayed in the same house.

You need to convince them that you are currently seperated first.

I suspect that the problem is that you've told them (correctly) that you are seperated. They have told you (correctly) to claim as an individual.

Now they are reviewing and they don't believe you are seperated. They think you have lied. They think you are committing fraud.

Proving they told you that is unlikely to help. Thry don't believe you are actually seperated. Irrespective of who lives where. Who claims what.

From what I can see it doesn't really matter who said what when. The problem that needs addressing is that they believe you are still a couple.

IneedAsockamnesty Tue 02-Apr-13 13:50:51

You can be separated and living under the same roof. They believe you are not separated and are living together as husband and wife.

You would do better to focus your energy on proving that is not the case.

Hopingtobehappy Tue 02-Apr-13 13:44:01

I have spoken to someone thismorning and it has now gone 'to appeal' but because it went to the wrong department they cant tell me any more than that at the moment.

AT some point I am going to request the recording of them telling me that I would HAVE to now make a claim as a single person because I had told them I was separated, even though H still lived with me, as that doesnt make any sense at all, if they are now saying we are not separated

I will also be requested recordings of the woman I spoke to in compliance as she was rude yet again to me today. There is simply no need for that, even if I was committing fraud of the highest order, she could speak to me like a human being.

IneedAsockamnesty Mon 01-Apr-13 18:03:40

Digerd,

Not true if you can prove it is their mistake and a reasonable person as well as the claimant would legitimately have no idea a mistake had been made and the mistake is not based on any lapse or dishonesty on the claimants behalf then you can apply for exemption from claw back.

About 60% of appeals for this are granted in the claimants favour. And 100% where the above criteria is met.

digerd Mon 01-Apr-13 16:43:00

They do make mistakes, and the law has always been the same. You have to pay Tax back, even if it is their mistake.
Have always found that unfair.

Xenia Mon 01-Apr-13 15:55:04

You need to get all the written evidence of your husband's separate residence, perhaps a sworn statement from him, his council tax bills, perhaps a statement from his neighbours confirming he lives there alone, loads and loads of evidence eof it to counteract all the evidence which suggests he lives with you and either yourself or through your accountant if you want to pay the accountant to do it both post by special delivery and email it to the tax credits people.

I would also spend a few minutes changing all the accounts at home such as bills into your own name which I did within the week of my divorce going through.

As people say you need to appeal and in time and using the right forms.

RedHelenB Mon 01-Apr-13 15:41:57

It seems very unusual for there to be no letter or phone call prior to this. Whenever they have had queries from me I always got more than on communication. Hope you get it sorted.

Hopingtobehappy Mon 01-Apr-13 12:04:16

Thanks Sock your posts make a lot of sense.

I do believe they have closed it too early, because they have had NOTHING from me. No utility bills, council tax statements, nothing.

I can easily prove that we are separated and it just seems odd that I havent had the chance to do so.

Hopingtobehappy Mon 01-Apr-13 12:02:08

Thanks for all the replies.

We currently have sole accounts as well as a joint account.

Utilities in my home are gradually being changed into my name (i.e. when a bill comes I have got it changed) I appreciate that I should be going through everything and getting them changed, but I have had a lot of other things as priority in the last few months.

We dont have a separation agreement in place, I had never even heard of one before this thread to be honest.

Whilst I understand the 'upset' from some about us having two mortgages, it does seem to be deflecting from the main issue, which is whether I am entitled to tax credits or not. As someone else pointed out you are not asked any of the questions when you apply for tax credits, so it seems strange to be able to make up the rules as you go along.

And the theory that tax credits payments are 'not for paying off mortgages' are they only available to people who rent? and what about the owners of the rented homes? is it ok for their mortgages to be paid off using tax credits?

I will speak to my accountant tomorrow.

I get the second mortgage thing though.

Marital home has enough equity so it is remortgaged to buy another property. A £400 mortgage per month is a property with a value of approx £80k so if you had a marital home with in excess of £80 equity to me it seems a good idea to remortgage and buy rather than rent.

I think of DH and I ever split that would be a consideration.

I think you need to call tax credits and ask them to withdraw the mandate allowing your accountant to correspond on your behalf and do it yourself. That way you can phone (follow up in writing) and appeal.

I may have missed in an earlier post but do you have a separation agreement in place? Are all utilities in your o,e in your name only? Do you have your own bank account?

IneedAsockamnesty Mon 01-Apr-13 00:07:31

No its up to the actual law and the rules.

The vast majority of claims they close without certain things happen (things the op says haven't happened) get reversed on appeal due to the compliance team deciding to early without enough info and paying no regard to their own rules.

Viviennemary Sun 31-Mar-13 23:49:10

They've closed the claim so obviously they don't feel she is entitled to the money. And from what information the OP has given I would tend to agree with that decision. But of course it's not up to me or anybody else here but up to the decision makers.

IneedAsockamnesty Sun 31-Mar-13 23:45:56

If that were the case they would have to have investigated her earnings not her relationship status

Viviennemary Sun 31-Mar-13 23:36:26

But my point is that if the finances are totally entwined and the OP is partly responsible for paying two huge mortgages totalling £300,000 perhaps they do not feel that her earnings merit the tax credits. None of us know the real situation so it's all guess work anyway. Not saying this is definitely the case but it could be a factor. And if she only separated last January 2012 why is she claiming two year's tax credits as a single person anyway.

EggwiniasRevenge Sun 31-Mar-13 22:36:55

I agree. The joint finances is the 'evidence' that they are still behaving as a married couple.

Taking out a joint mortgage after seperating is 'evidence' thar they are still behaving as a married couple.

Neither is proof though (you don't have to be a couple to take out a joint mortgage).

I was just trying to seperate 2 issues being debated on this thread.

1. OP has had her tax credits withdrawn as a result of investigation into her relationship status. This should be the main focus of the thread.

2. Lots of people are getting hung up on the second house. £300k mortgages. Questioning entitlement to tax credits. None of this is of any help to the op imo.

The ownership of a second house worth £1million would be irrelevant. She could still be entitled to tax credits.

Taking a second mortgage in joint names after seperating is relevant to investigation (though not initial claim per se). But only on the grounds it is a joint investment and not a second house.

The finances do need looking at and disentangling as per my original post but they should not be proof that these people are living together as a couple. It may support the hmrc case but should not prove it.

The op needs to find out what info/evidence would be needed to counter their claim and focus on sorting that. You can't remove the facts that finances are still joint, but can you provide additional evidence that you are not a couple as detailed by sky?

Once this is sorted then look at what xan be untangled. I would suggest:

Buisiness account as joint signatories to deal with the business finances.
Perhaps a joint account to pay mortgahe and house repairs.
Sole accounts to pay out day to day living expenses. Utility bills would come under this category and should not ve paid from the joint account. (Think I've seen elsewhere on thread tgat they are treated as a joint expense?)

IneedAsockamnesty Sun 31-Mar-13 22:33:33

Flibberty.

Having finances still tied up like that is pure stupidity but its not a crime if the op can show that there is a good enough reason for it then she will be fine.

That goes for the mortgage as well.

The second house is relevant though. Not because of the size of the mortgage relevant to income; but because it was bought In Joint Names after they told tc theyd split up. And two years down the line their finances are still arranged as a married couple. Many married couples dont have a joint account so it just looks odd that a separated couple still have everything joint.
Yes untangling finances and joint account can be a pain, but if you are separatex its what you do!
I am with others who say the accountant may be making this worse. Can you speak to tc on monday and say you need in writing exactly what grounds they havestopped your claim because you want to appeal. At least then you will have facts and not a bunch of mmums pondering what the reasons might be.
Scuse typing am on phone.

skyebluesapphire Sun 31-Mar-13 20:17:32

I think that when Universal Credit comes in, they are going to hit the low earning employed and the self employed people. You will be deemed to earn at the minimum wage for so many hours. so company directors that pay a low salary will be deemed to earn say 30 hours a week at NMW and so will self employed people.

i dont know exactly whats what, but that is the gist of it.

They are doing that so that people cant deliberately keep their earnings down to get tax credits.

(Im not talking about you OP, just discussing how/why they are going to change the system)

RedHelenB Sun 31-Mar-13 20:04:17

But if they investigate then they need to know about mortgages as in this case.

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