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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.

RedHelenB Tue 26-Mar-13 17:17:14

Are you still linked financially or are your finances separate? Are you divorced or have you correspondence that shows you are seeking a divorce?

I think you need to ring up & ask for directions on how to appeal the decision.

Nevertruetomyself Wed 27-Mar-13 09:40:31

We are linked financially and will be for the foreseeable. We have joinet mortgages (on his house and mine) plus loans and credit cards.

We arent divorced, we are waiting until we have been separated for 2 years, its amicable and there is nobody else involved so we would rather do it the cheapest way as we are struggling financially and the business is not doing well.

I have been ill with depression and anxiety and so passed everything on to my accountant to deal with because I didnt feel like I oculd cope, so I am now not 'allowed' to phone them as my accountant has to deal with them, but they have stopped my tax credits and now I am struggling even more

greenfolder Wed 27-Mar-13 10:55:44

so, how can you prove it? how can they? presumably exh is paying council tax elsewhere and has all his bills and correspondence sent elsewhere. i wouldnt have thought being linked financially could be the issue within 2 years as many ex couples are in this position. was there anyone else involved?

Nevertruetomyself Wed 27-Mar-13 11:01:30

He is paying council tax elsewhere and I can easily prove this.

One of the things they said was that because his name was on bills (i.e. electric, water etc.) that he was still living with me! it wasnt a priority to get these things changed to my sole name, although I am doing them as new bills come in.

We bought another house in joint names for him to live in, which I think they had a problem with (it wasnt like we bought for cash, we now have a joint mortgage of over £300K with 35 years paying them! we did that so we didnt have to rent! I would have been entitled to HB if I had done that, maybe I should have!

There was nobody else involved in our split and we both live alone, we share custardy of the children.

I fully understand their need to investigate these things but I feel like we have done all the right things and are being penalised for it.

RedHelenB Wed 27-Mar-13 11:43:48

How long ago did you take out the second mortgage?

LIZS Wed 27-Mar-13 11:47:38

hmm I can see why doubts may have been raised . Presumably this property was bought since your split and claim ? You make a single person claim but appear to have on-going joint investments.

Nevertruetomyself Wed 27-Mar-13 13:50:28

Yes the mortgage was taken out since we split.

I rang and told them that we were splitting in January 2012, I told them then that he was still living there until we sorted out somewhere for him to live, but they insisted the claim go as a single one at that time. The mortgage was taken out in June and he moved into the house shortly after, when the sale completed.

We have lots of ongoing investments as well as the mortgage, we have life insurances, bonds, CI insurance and the business, what alternatives are there? I thought we were being sensible in getting a mortgage rather than renting and claiming HB ! obviously we werent as they have now taken all of the claim away, I get nothing at all, but when we were a couple we got something !

RedHelenB Wed 27-Mar-13 16:43:40

The mortgage should have been taken out in his name & the house you live in transferred to yours. You do seem to be very linked - the whole point of separation is that you loosen the links! Has he been paying you child maintenance?

Nevertruetomyself Wed 27-Mar-13 23:11:14

We werent able to do that because of my wage ! if only it were as easy as that then of course we would have done that.. there is no way that I would have been able to get a mortgage on my wage alone.

I get a wage from the business and he pays me child maintenance which pays the mortgage where I live.

We wont be able to loosen any ties whilst we still run a business together.

I dont understand how this is wrong? I am going mad with the stress :-(

RedHelenB Wed 27-Mar-13 23:46:54

The second mortgage should have been be in just his name then I suppose. But when you divorce you will have to sort the finances out surely?

RedHelenB Wed 27-Mar-13 23:48:26

I am a bit confused as to how you can get a mortgage for £300,000 but still be entitled to tax credits though?

wannaBe Wed 27-Mar-13 23:57:17

op you haven't done anything wrong. Me and my stbxh have a joint mortgage on my house because I was a sahm when we split (in process of setting up my own business) and he took the mortgage out on my house so that A, I wouldn't have to rent and would be on the housing ladder, B, that it would be our (mine and ds') home, and c, because we are amicable too and he doesn't want to see me struggle esp as I am also the mother of his child. He pays me child maintanence and some more which would be classed as spousal maintanence which currently cover my mortgage payments. Once my business is running I will take over the payments on my mortgage and will take it over altogether once I am able to get the mortgage transferred into my name only.

TheSecondComing Thu 28-Mar-13 00:01:05

Message withdrawn at poster's request.

Nevertruetomyself Thu 28-Mar-13 08:56:54

We couldnt have taken out the second mortgage in just his name either, it took months to sort out and we had to remortgage our first house to pay tyhe deposit on the seoncd, if the second had just been in his name where would that have left me?

We run a business together so our 'finances' will be tied forever, or as long as we run the business together. We will be tied to the mortgages until at least the chuildren leave home or come out of education. Surely lots of couples are tied together like that for years and years?

Our mortgage is over 35 years, I earn £10K per year, He earns £25K, the second mortgage is interest only. The first is an overdraft account.

Thanks Wannabe that sounds similar to us. We were trying to do the rightthing, its notg like we are sat on a goldmine, we are mortgaged up to the eyeballs! I have a friend who has her rent paid in full by HB and she earns more than me!

The question is what can I do about this? they have stopped my payments and I have just had another night with no sleep, this is making me ill :-(

Nevertruetomyself Thu 28-Mar-13 08:57:39

'Who on earth thought it was a good idea to buy a house, post separation, in joint names???'

The alternative would have been for me to move into rented and pay more per month than the mortgage is.

RedHelenB Thu 28-Mar-13 09:21:18

Why couldn't your ex move into rented? Sorry but the figures are not adding up so I can see why your tax credits have been stopped, sorry I know that's not what you want to hear!

Nevertruetomyself Thu 28-Mar-13 09:39:47

Because rented would have cost around £700 per month and by buying, the monthly costs are less than £400.

H would not be entitled to HB, I probably would, but what a waste of money!

We were entitled to CTC as a couple, now I get nothing? how does that make sense?

Also how are these rules made up? because I am paying a mortgage on a house I shouldnt get CTC? if the rules were shown to me in black and white I might understand it, but my understanding was that it goes on your wage, not on what you do with your money?

Sorry I know that you are trying to help, but are you basing this on your knowledge of the system or just your opinion on whether I should be entitled?

ArseAche Thu 28-Mar-13 09:45:01

nevertrue - are you the OP? I am not sure who is asking what here?

allnewtaketwo Thu 28-Mar-13 09:54:45

I'm a bit confused. You earn £35k between you and have 2 mortgages, 1 of which is for £300k shock

PollyEthelEileen Thu 28-Mar-13 10:00:01

Does the system really allow someone on tax credits to buy a second home?

TheSecondComing Thu 28-Mar-13 10:58:55

Message withdrawn at poster's request.

Hopingtobehappy Thu 28-Mar-13 11:35:31

SOrry to confuse, I am the OP and Nevertrue.

No the two mortgages between them are £300K

The home isnt a second home, we live in one each. The reason that we did that was because when we looked into rented (for me or H) the rents were very high. £700 for 2 beds, even flats (although not many flats in our area)

We workd out that it was far, far cheaper per month to buy, so we borrowed the money against the home I live in.

Where I live, the house is worth £200K, its an overdraft mortgage and we went up to our limit to put a deposit down on a house for H, that house has a mortgage of £100K and its worth about £120K

We dont have a huge portfoio of houses, and the second one is highly likely to not go up in price (not that it should matter surely?) but the monthly outgoings are less doing it that way?

As we used to get tax credits when we were together, how are we suddenly entitled to NO TAX CREDITS when we are apart? how does that work?

(Also to add, when we first separated, they told us that I had to have a single claim, even though H was still living with us. SO had we stayed living together we would have been perfectly entitled to claim?)

allnewtaketwo Thu 28-Mar-13 11:40:25

Well the monthly cost may be cheaper than rent but if the mortgage is interest only who is going to sort out a repayment vehicle for it??? Who on earth gave you this mortgage?

50shadesofvomit Thu 28-Mar-13 11:51:57

You earn 35k between you and got mortgages totalling 300k? How do you afford the repayments? People on twice your combined wage would find the repayments tough especially when interest rates rise.

Do you mean the houses are worth 300k total?

Hopingtobehappy Thu 28-Mar-13 12:00:32

Are we talking about mortgages here or are we talking about tax credits?

We mortgaged ourselves up to the eyeballs over the longest period possible, the two mortgages are in the region of £285K (give or take depending on the overdraft mortgage) between them, we are paying them over 35 years and we used the business for the repayment at the end of term. Our financial advisor helped us.

It would have been tougher to pay a rent of £700 as opposed to approx £400!

I move money around using the overdraft mortgage, not that that has ANYTHING to do with anything !

If we were entitled to TC as a couple, how come I suddenly arent as a single? is there anyone who can help with what I can do next, rather than discuss my mortgage?

allnewtaketwo Thu 28-Mar-13 12:13:30

"Are we talking about mortgages here or are we talking about tax credits?"

I think the reason why I and other posters are talking about the mortgages is because it's clear the 2 of you are very much financially linked, hence probably very relevant to how the tax credits people see it too. Yes you have a joint business but that has nothing whatsoever to do with needing to take out a joint mortgage on a house after separating.

You're not "financially" single, which is probably how the tax credits people see it

Hopingtobehappy Thu 28-Mar-13 12:23:49

OK thanks, right, so is that how it works?

Its a case of making sure that you do things a certain way? (which dosnt seem very clear)

Bacause a friend of mine gets full WTC and CTC and her ex pays her £2K a month in maintenance payments, which pays her mortgage (still in his name as well) and leaves her plenty over.

And the fact that I told then we still lived together and they changed my claim to a single one?

And as we were entitled to tax credits as a couple, if they are saying that we are still a 'couple' (whether financially or in a relationship) why havent they just put the claim back to us being a couple, rather than stopping it?

It seems a little made up to me! do they actually have any rules in place or is it just a case of whatever the 'tax credits people' decide?

Also, what if I wanted to take out a mortgage with a friend? would I not be allowed to do that whilst claiming tax credits? because another friend did just that, as a business venture.

allnewtaketwo Thu 28-Mar-13 12:27:17

I've got no idea if that how it works as I don't know anything about tax credits. But a hunch tells be that they're having trouble believing you're actually separated

PollyEthelEileen Thu 28-Mar-13 12:27:20

It looks to an outsider that you are very much a couple who want to use benefits to make capital investments.

If you had made a proper financial break from one another, would your tax credits have been stopped?

Hopingtobehappy Thu 28-Mar-13 12:39:34

If that is the reason that they have stopped the tax credits then great, they can pop round and see me in myhome where I live with the kids, or in his home where he lives with the klds when they stay there.

If only that were true and we were (clever? devious?) enough to have done something like that. Hardly worth the bother with the amount of stress that we have gone through trying to run a business together and keep everything ok for the kids (and us)

If I had moved out into rented I would have been entitled to HB as well as WTC and CTC, I would also have had the free school meals, Council tax benefit plus everything else you get, so yes, if we had been able to 'financially' separate properly I would have been entitled to a lot more than now!

Had we stayed together and bought another property, we could have rented it out so we would have been better off.

We each pay £1200 in council tax as well!

The route we have chosen was obviously the wrong one, despite trying to do the right thing for us all.

My main concern, as well as not even getting as much in CTC as we did as a couple, butthe fact they are asking me to pay back 'overpayments' when I have told them our circumstances throughout, they said I was entitled to the money I didnt ask for it.

MirandaWest Thu 28-Mar-13 12:52:54

If you were getting WTC you wouldn't get free school meals but I realise that's a small point.

Looking from the outside, you and your XH are financially very much linked with two houses in joint names. For CTC it doesn't matter whether you rent or own but surely you can see that having said you've separated from your husband and then buying a house with him looks like you could be just living separately but hoping to gain financially.

If you had gone into a rented house on your income you would have got some amount of HB, WTC dependent on no of hours worked and CTC. You might have got some council tax benefit. Whatever you should have single person discount on your council tax (even in the situation you are in now).

I understand about waiting until 2 years to divorce (that is what my XH and I are doing) but for everything else we are financially separated. Changing names on bills is very important. I did it as soon as he left. You are 18 months down the line.

Does he pay you maintenance? Mine is an informal agreement but I have detailed records of how it is calculated and when the DC have stayed with him.

You need to realise that it's not just the facts of what is happening but how it is perceived from the outside.

RedHelenB Thu 28-Mar-13 12:59:36

You wouldn't get housing benefit in all probability because you say you have investments joint with your husband & there is a savings link.

As to tax credits - it does also look as though you earn too much money to qualify if you have recently got a mortgage of £300,000.

Does your ex pay you a set amount of maintenance each month? If not, that is another flag that you are in fact still a couple to all intents & purposes.

As i said before I know it's not what you want to hear. But if the claim was in your name you need to be the one on the phone trying to sort it out not your accountant.

Hopingtobehappy Thu 28-Mar-13 13:04:44

Im not allowed to speak to them now, I instructed my Accountant to deal with it, so if I speak to them they wont deal with it any more, so I am in an even worse position.

I feel sick that they think we would have set this up to get tax credits, it has been extremely hard trying to carry on working and making sure the business doesnt fold in the midst of all this, the last thing on my mind was changing household bills!

Tax Credits know how much we earn, we are self employed they can see the amounts declared, and we had a tax investigation 2 years ago which came up with them owing us money, so they know that is correct.

RedHelenB Thu 28-Mar-13 13:09:20

So is your accountant disputing it then?

Hopingtobehappy Thu 28-Mar-13 13:11:58

They are doing it all in writing, they have written to them saying that tey dispute the claim being closed before I had a chance to do anything.

I just feel totally out of control and im worried sick about it all

PollyEthelEileen Thu 28-Mar-13 13:22:33

They won't get letters from claimants' accountants everyday wink

Hopingtobehappy Thu 28-Mar-13 13:23:11

How do you mean?

Hopingtobehappy Thu 28-Mar-13 13:31:16

SOrry just to also point out we dont have over the savings limit for anything, we have shares and bonds worth about £2K, neither of which are worth touching as we invested a lot more than they are worth now.

Just wanted you to know that as it feels as though people think I am sitting on some sort of goldmine!

RedHelenB Thu 28-Mar-13 14:38:03

Sorry, it's the way you posted about investments that made it sound as though you had a considerable amount!!!

Hopingtobehappy Thu 28-Mar-13 14:49:46

Not at all, I wish !

Its just things that are all joint, we have some bonds, some shares and life insurance, plus CI.

If we cancelled the life insurance what would happen to the house if one of us died, plus the business. the shares and bonds are not worth cashing and we cant start changing them into sole names as who would get them! they are for the childrens future anyway.

Even the houses, they are worth different amounts, so who would have which one!

We honestly thought that we were doing the sensible thing, as someone has pointed out, you can get TC if you are mortgaged or renting, I dont understand why this should make a difference.

I can sort of understand why some who have come on here may say we shouldnt be entitled because we both joint own 2 houses, but if we were able to buy (mortgage) one each, would people feel the same?

RedHelenB Thu 28-Mar-13 17:06:29

When you divorce you need to sort the finances out & separate your financial affairs asap. Does your ex pay you maintenance because if he hasn't then I really can;t see TC changing their monds on this one.

MirandaWest Thu 28-Mar-13 17:15:00

If you are separated you shouldn't have joint finances basically. Buying the other house on a joint mortgage and still holding joint investments is the problem. Not hiw much they are (afaik there is no savings limit with tax credits at the moment although this will change with universal credit).

IneedAsockamnesty Thu 28-Mar-13 22:38:35

Op read that.

To be considered as a couple you have to be acting as a couple would its not just financial

I just can't understand how a not-couple with a combined income of £35k got even an interest-only mortgage for nearly £300,000.

Your finances seem very much combined, I wonder if the tax credit bods think you might be 'manipulating' the figures of who earns what from the business, in order to claim the maximum?

Ie saying you are separated and thus the only income they can take into account is your £10k which would give you I think about £9k tax credits for 2 children, per year.

I can sort of see why they have looked into your claim... as a single parent you would presumably get a lot more tax credts than when you claimed as a couple - but jointly owning property, (small) investments etc; to the authorities that might equal coupledom

wannaBe Fri 29-Mar-13 02:04:52

my xh pays me maintanence both for me and for our ds. The payments go into my bank account as such. The mortgage has his name on it because I wouldn't have been able to get a mortgage in my own right. When we were reading about divorce etc online the overwhelming opinion was that women almost never get back on the housing ladder after divorce because they simply cannot afford to as they are generally financially worse off. However the mortgage payments go out of my bank account and come out of the maintanence he pays me, so although we do have a joint mortgage on this house he's not paying that in addition to anything he's paying me iyswim.

He bought me out of the family home so he has one mortgage in his name and his name on my mortgage. We had a separation agreement to confirm that he bought me out of the house and that that money I have used as a deposit on this one.

So the only financial link we have is the mortgage. but now I'm guessing that even though we have that it's a financial link even though I have a copy of a separation agreement and divorce will come through shortly.

I might as well just withdraw my claim for tax credits now.

RedHelenB Fri 29-Mar-13 07:29:40

That's a different situation to OP's Wannabe. You aren't linked by tweo mortgages, investments, a business etc etc.

Hopingtobehappy Fri 29-Mar-13 10:17:02

We didnt get an interest only mortgage for £300K, if you read my posts we used one mortgage to fund another. ALl done through our accountnant, all perfectly legal , it took a long time to sort out, but we did it.

I dont believe that we are the only couple who have split whilst still having life insurance, bonds and credit card bills. You cant just get rid of these things!

I dont really understand the fascination with my mortgages, but hey ho!

I completely understand why they have looked into my claim as well, but I dont understand I now get nothing when we got money as a couple.

As the answers I have got on here are only 'opinions' it hasnt really helped! I wanted a legal point of view and a 'where to go now' stance. Not at all helpful telling me to put up and shut up.

Hopingtobehappy Fri 29-Mar-13 10:18:03

Wanabe's situation is actually very similar to mine, I dont see how that is different than mine it at all, apart from that they have a separation agreement, which I havent.

difficultpickle Fri 29-Mar-13 10:31:35

I had to pay back tax credits even though I am PAYE and they told me I was awarded the correct amount even though I queried it. They later said I had been overpaid. Unfortunately I only queried by phone so had no written proof and I couldn't check whether the amount was correct as they removed the calculation checker from their website. Really frustrating as it will take me years to pay back.

Still not sure how I was actually only entitled to very little as I had very little income for a year when I was on maternity leave (only 6 weeks at 90% followed by 4.5 months of £100 per week followed by 4 months of £0 doesn't add up to a lot). I tried to dispute it but found them next to impossible to deal with. What I found odd is they don't even send a yearly statement to show me what my outstanding balance is. I have to call periodically to check.

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.

PollyEthelEileen Fri 29-Mar-13 18:03:34

What does getting back with her ex mean?

Resuming a sexual relationship? The tax credits folk don't enquire about that.

Hopingtobehappy Fri 29-Mar-13 18:06:52

Polly, I have explained several times now that the mortgage repayments are LESS than renting.

Lots of people have mortgages, AND can make the repayments, AND claim tax credits.

As I have stated several times also, I did not ask for tax credits, they paid them to me and then changed their minds. My circumstances didnt change from when I told them.

They know exactly how much we both earn, unless their departments donttalk to each other.

I dont make the rules and having been a taxpayer for 25 years I dont want the money I pay to be wasted either. Believe me, I have paid a hell of a lot more in tax over the years than I get back, and that isnt including the VAT and CIS payments that I collect for them (at no charge to HMRC) either.

I asked a question about my ciscumstances and all I have had from some people are their opinions on whether I should get tax credits or not, that really isnt helpful.

Were, thank you and very good point about maintenance payments, in theory I could claim to earn much less, or even nothing at all and my H give me a fortune in maintenance.

Sock, thats also a good point, I really cant win with HMRC here can I!

Hopingtobehappy Fri 29-Mar-13 18:08:21

Polly, so anyone who remains on good terms with their ex, is still actually with them?

We never had sex when we were together anyway, so if sex is anything to do with it, I can make a back claim for about 10 years :-)

mrsbungle Fri 29-Mar-13 18:20:38

I believe what you are saying OP but from what you have written I imagine it looks (to the tax credit people) that you are not separated. You appear to be living as a family - just in separate houses.

Maybe you should see a solicitor with regard to a separation - maybe they have some advice re how other sort their finances in these situations.

I also think people are hung up on the mortgage thing because it seems a lot of mortgage for a combined salary of £35K, I wasn't aware that was possible! If you pay less than £400 a month for this, that 's also surprising (not saying it's not true). My mortgage is £145,000 and I pay around £800 a month. I think I need a better deal!

Anyway, sorry to go off the point. Could you face just phoning them yourself? Surely they have to talk to you regarding your own claim? At least you would have first hand information rather than second hand from the Accountant?

It must be really stressful to get a £10K bill that you can't afford out of the blue. Good luck.

coribells Fri 29-Mar-13 18:22:34

my ex and I are separated, not divorced. His name is still on deeds to this property, and and some of his mail etc comes . bank stuff etc. I was also investigated by tax credits on two occasions. My ex is renting and where he lives is not very secure in terms of mail(shared letter box) . it was complicated by the fact my ex lived in this property by himself after we separated.( I was living in rented) I moved back here after landlord wanted the property back ( and he moved out) I explained all this to the tax credits. I wrote it in a letter, it also helped that we had been to mediation to agree to this arrangement and had it in writing. Have you sort any legal advice, is there any professional person who has advised you that could back up your claim.

Hopingtobehappy Fri 29-Mar-13 18:37:07

Mrs Bungle the £400 mortgage is for H's house, the mortgage for my house is over £1000.

Obviously we would have to pay the mortgage for the house I am in anyway, but if one of us had moved into rented it would have been around £700 to rent somewhere.

The mortgage that is over £1000 is an overdraft mortgage, which basically means that as long as we pay in a certain amount each month, that is fine, at the moment I am withdrawing the money and paying it back in, but that is mainly because the business has serious cashflow issues and I have just paid our tax bill, plus a large VAT bill, anyway beside the point.


TAX CREDITS ARE NOT PAYING OFF MY MORTGAGE! unless we find the full amount to repay at the end we will either lose the business, or will have to sell one or both houses to pay the bank back.

I really dont understand the relevance, as if we separated and lived in rented then we would both have to pay the rent! whats the difference?

No I cant phone them as my accountant has told me not to as they are now dealing with it. They were very nasty to me when I did speak to them to be honest so I am not sure I can handle it. Yes it is very stressful and I am very worried about it, thank you :-)

Hopingtobehappy Fri 29-Mar-13 18:40:35

We have had no legal advice. We split very amicably, nobody else involved, have to be friends for the business, we decided we would divorce after 2 years, we didnt see the point in spending monmey on solicitors etc. when we dont have to !

Our Accountants knew we had split as we asked them for figures etc. to help us remortgage.

IneedAsockamnesty Fri 29-Mar-13 18:46:48

Polly it means living togather as if you are husband and wife.

That actually involves you living as the same household under the same roof and NOT either living in two separate houses or sharing the same roof but living under it as two people not in a relationship that is self defined as being part of a couple.

Op did you read the sections relivant to you on the link I posted? Its tax credits own rule book and really worth a read.

IneedAsockamnesty Fri 29-Mar-13 18:51:22

Oh and you need to find out exactly how your accountants are dealing with it as they are experts in money not in defining relationships. Let me know when you have gone through the link and then I will be more than happy to give you a list of instructions of things to prepare that can be sent to tax credits to bak up your stance on the matter.

Hopingtobehappy Fri 29-Mar-13 18:53:37

Sock, yes still reading !

I think they mighthave terminated my claim because of 'information not recieved' they first wrote to me in November, I rang them straight back and they were awful to deal with and I wasnt well, that was when my Accountant took over and it took a few weeks to sort out the forms etc. On the letter they wrote to me saying they had stopped my claim it said that it was because they hadnt recieved the information they had requested. However neither me or my Accountant had recieved a letter asking for anything specific.

Hopingtobehappy Fri 29-Mar-13 18:55:16

I have to say I am very confused!

Either you are with someone or you arent, like you say the definition of being separated is when you separate!

Thanks sock I really appreciate it, I will keep reading!

RedHelenB Fri 29-Mar-13 19:00:24

Hopingtobe happy - you DID ask for tax credits in that you gave the information as you as a single earner! I am not saying I don't believe you but since you won't answer my question re maintenance (fair enough - you don't have to) I assume that everything is coming out of joint accounts hence you are operating joint finances after 18 months of separation. Dating other men isn't the issue - you could have an open marriage after all. All I am saying is I can see why tax credits made that decision. The compliance team visited me & wanted to know a lot of details, scrutinising bank statements etc.

Wereonourway Fri 29-Mar-13 19:05:46

Sick- what I Meant in previous post was that the op had considered herself to be single- in fact she discussed this during a call to them.

Hmrc have considered her to be in a relationship- I was trying to say that if op goes by their decision, which they have just made, could the previous 18 months tax credits claim be changed retrospectively?

I actually work for hmrc, but am relatively new to it and as such cannot answer that question. Once compliance have involvement in a claim, advisors have absolutely no powers over it, until cleared

Hopingtobehappy Fri 29-Mar-13 19:07:51

Yes he pays maintenance, in the form of paying the mortgage.

We both get paid and we both then pay into the joint account.

I have never disputed that we have joint finances.

I gave them information and THEY TOLD ME that I was then a single claimant. H still lived with me at that time.

SofiaAmes Fri 29-Mar-13 19:08:16

This is bringing back memories. I spent a lot of time reviewing the tax credit rules and quoting them back to them. It seemed that no one who worked there actually was familiar with their own rules. We too did not fit into their little boxes of the conventional family setup and they just couldn't get their heads around it, despite having written guidelines outlining exactly what they were supposed to do.

Just ringing up the tax credits people and telling them you have separated is not enough to actually BE separated for tax credits purposes iyswim.
You are meant to do that as just one part of all the things you have to do to actually be separated.
I would take responsibility back from the accountant. For ond thing he will prob charge you for his time doing it!
Can you speak to tc and ask them what exactly they need for you to be seen as single. And if they tell you that means no jojnt mortgages or investments then youll have to do that.

Hopingtobehappy Fri 29-Mar-13 19:10:41

It also reminds me of the tax investigation that we had a few years ago :-(

I was told 3 different answers by 3 different advisors, then a 4th told me that if I was wrong I would be the one held responsible! WTF!!

Hopingtobehappy Fri 29-Mar-13 19:12:22

Flibberty, how can you just suddenly have no joint mortgages?

And as I have said a few times now, THEY TOLD ME THAT I HAD TO CLAIM AS SINGLE because I had told them we were separated.

I have kept my side of the bargain, they seem to have made theirs up as they went along

Hopingtobehappy Fri 29-Mar-13 19:13:21

The Accountant is charging me, but it is worth it because it was making me ill, he has agreed a set price though, as he has worked for us for a lot of years.

Hopingtobehappy Fri 29-Mar-13 19:26:06

From what I have picked up so far:

- You can be separated but live in the same house and you can claim tax credits
- You can live in separate houses, but have a joint account and mortgages so therefore you are not separated and cant claim tax credits
- You can be separated, live in different houses and get £10K a month in maintenance, but because you dont have a joint account you can claim tax credits
- You can be separated, live in separate houses and because you dont have a mortgage you can claim HB and tax credits
- You could have a portfolio of 50 houes, all paid off in full, but be able to claim tax credits

Confused? I am !

Hopingtobehappy Fri 29-Mar-13 19:27:44

What if my date tonight goes well? will I have to add him to my claim as well?! he owns his house outright, I'd best tell him not to pay for dinner :-/

Please stop blaming the tc person. If you ring up saying you are separated then of course they will say you have to claim as a single person! But then Iits up to YOU to then actually BE seseparate financially. You still have married finances, cant you see that?
Separated couples either buy each other out of the house or keep both names on to sell it say when kids older. What you would not expect is for them to buy a 2nd house in joint names after you say you have separated.
And now you tell us you still both pay into a joint account, hd pays you no maintenance but pays the mortgage, and you have joint investments.
You should have used that call to tc as starting point to begin separating physically and financially.

TheSecondComing Fri 29-Mar-13 20:12:33

Message withdrawn at poster's request.

Floggingmolly Fri 29-Mar-13 20:21:12

You're still paying your salaries into a joint account; from which you pay your two joint mortgages???
The tax credit people aren't interested in your sleeping arrangements; they're interested in your finances and your finances aren't separate.

Floggingmolly said in one short half sentence what I've been trying to say in huge paragraphs grin

FiveGoMadInDorset Fri 29-Mar-13 20:43:34

As far as HMRC are concerned nothing is separate therefore you are still together.

IneedAsockamnesty Fri 29-Mar-13 21:39:08

That's actually not the case at all.

Being part of a couple is not defined purely due to financial behaviour. And tax credits claiment compliance own rules only have about 20% of the "in a couple or not" evidence/ questions as financially related behaviours the other 80% is none financial.

But surely it depends on what the questions are in that 20%?

Like, 'do you have separate bank accounts'..

IneedAsockamnesty Fri 29-Mar-13 22:02:25

No they are relating to devision of the particular claimants household bills and responsibility for those bills but any maintainance payments are expressly protected from consideration even if its provided by paying bills as opposed to handing money over.

Hopingtobehappy Sat 30-Mar-13 12:25:45

Surely if they have a list of questions to define whether you are a 'couple' or not, then they should ask them? I have never been asked any questions at all.

Hopingtobehappy Sat 30-Mar-13 12:28:10

From their website:

'If you're married or in a civil partnership your joint claim ends when you have legally separated or your separation is likely to be permanent'

Hopingtobehappy Sat 30-Mar-13 12:34:15

Flibberty I was asked the question as to whether the money was paid into a joint account and I told them it was.

Sock I cant find the questionnaire, do you have a link?

Hopingtobehappy Sat 30-Mar-13 13:17:04

Found this:

Which makes no definition of being a couple for financial reasons.

LisaMed Sat 30-Mar-13 14:35:38

You have a joint account into which money is paid for both of you and both of you draw from. You have joint mortgages. You have a joint business. You have children and presumably work together to raise them. You seem very entangled. You deal with things together amicably.

Have you considered going to Relate and reconciling? If it is possible it sounds like it would solve a lot of problems.

skyebluesapphire Sat 30-Mar-13 14:49:56

I was investigated just before Xmas for making a single claim when they believed that my XH was still with me. I made a single claim on 8 April 2012. They investigated me for 5 April 2012 hmm which had always been a joint claim anyway!

At the time we were divorced, but still had a joint mortgage as these things take time to sort out and my remortgage was going through.

I sent copies of texts, the decree absolute, my council tax bill and other things as proof that he did not live here.

I understand that some of your things, like mortgages etc will take time to sort out, but you do need to be sorting out everything else. Get your own bank account, pay your own bills, get all bills in your own name etc. It has to be done sooner or later, so do it now.

Viviennemary Sat 30-Mar-13 14:58:16

If you are still linked financially and jointly own two properties then I think it is right you should be paying back the money. It doesn't sound to me that with jointly owned houses and other joint finances and you aren't even divorced they are right in saying that you were not entitled to the money in the first place.

Viviennemary Sat 30-Mar-13 15:00:59

And just to add if your name is on two title deeds then you are tecnically the owner of two properties.

Could the reason you're no longer entitled, even as a joint claim, is because the tax credit earning threshold has changed and is now lower?

<trying not to wonder where you found a financial advisor who could get you two joint mortgages totalling £300k on a joint income of £35k. We struggled to get a descent £70k mortgage on a similar income>

IneedAsockamnesty Sat 30-Mar-13 15:42:43

Some of the questions cannot be published under FOI but most are in the link I gave you before.

Its stuff like do you socialise as a couple, do your friends and neighbours perceive you as still being a couple, do your children know you are not together as a couple,do you go on holidays together for any other reason than child contact.
Do you cook him meals on a regular basis other than if he is sharing a meal with the children for contact purposes, do you or would you do his housework, does he fund anything in your home other than anything he is obliged to do due to maintenance obligations or court orders or you in his.

Do you introduce yourself to anybody as a couple and is it likely that your friends or family would feel that you are still a couple and invite to to attend functions as a couple.

Have you informed any third parties such as schools or docters ect that you are no longer a couple,do you have any agreements in place formal or otherwise that show when each adult is responsible for the care of the children ( contact) or is everything done on a ad hoc basis.

Hopingtobehappy Sun 31-Mar-13 10:52:00


Not going into detail on a thread about Tax Credits (which also seems to be about my mortgage as well, fascinating!), but we will not get back together, our relationship is most definitely over. Lots of people can split amicably, when children are involved its the only thing you should be doing in my opinion, unless you are very selfish.

Thanks sock I managed to find a few things after I asked you that.

Going by what they say on their website, and from what you have said above, we are not classed as a 'couple'.

I will ask my accountant to get copies of phone calls that I have had with them as well, where they told me that I needed to make a single claim.

Groovee Sun 31-Mar-13 11:09:34

I'd ask your accountant to put in an appeal. We did this and got the money backdated.

flatmum Sun 31-Mar-13 11:28:17

But surely going forward none of this will make much difference as there declared joint income is 35k which is now too much to get much in te way of tax credits? And that is declared income from someone that is self employed. Are you sure he is not earning more from the business OP and not declaring it which has set HMRC into you? It does seem a very low income to sustain 2 mortgages, 2 kids and an accountant.

It is a very common scam/loophole (depending on your point of view) to make out like you are on a very low income but receive more funds from a business in the form of tax dividends. For example I know a couple who earn well into 6 figures from his business but he pays the wife 7k (to take advantage of her ya allowance) and himself a salary of 10k so they can claim full tax credits. Their children go to private school. Not saying this is what you are doin but HMRC are aware I think that a lot of people are and are attempting (rightly IMO) to stop it. You may be a victim of this.

Hopingtobehappy Sun 31-Mar-13 12:09:23

No if only that were true flatmum :-)

We used to earn almost double that but things not going so great at the moment. Next years projected is less than that if nothing changes.

Going forward of course it will make a difference as we are NOT a couple.

(we dont sustain an accountant LOL!)

Hopingtobehappy Sun 31-Mar-13 12:13:11

With regards to the loophoel that you are suggesting above, are you sure about that, because you still have to pay tax on dividends and they are classed as income for CTC as far as I know.

If it is true and they are able to claim tax credits, do you not agree that they should be the sort of people that are being targetted to stop? because a lot on this thread seem to be rubbing their hands in glee that mine have been taken away, dispite those same people saying that £35K (between me and ex) is a low wage! and forgetting altogether that I only earn £10K!!

RedHelenB Sun 31-Mar-13 12:43:13

Did the letter come out the blue or were you asked to send some info in first OP? It does sound very confusing but I think you need to take back control from your accountant & find out how you appeal. BUT, I really would now have separate bank accounts & your ex paying across 20% of his income as maintenance minus the overnight stipulation (look on CSA website for figures) He can pay you more of course but that's the minimum!

Hopingtobehappy Sun 31-Mar-13 13:10:45

No we didnt get as far as a letter asking for anything, they say they sent one but it was never recieved from either me or my accountant.

I will have to sort out the bank next week, its going to be a nightmare as there is so much coming out of the account, but I may be able to just get it put into my name as H doesnt use it anyway, I do everything with the money.

Surely maintenance agreements are between couples? I thought that the 20% was just if you go through the CSA (def no intention of doing that, I have heard more horror stories about them than I have about HMRC) not that it matters, as he pays more than that anyway.

flatmum Sun 31-Mar-13 13:12:57

I definitely agree they should be targeted first and I feel really sorry you are going through this (where is exH? Is he shouldering some of tej stress?)

However, I don't see that you should have got tax credits when your joint income was 70K (if you did?) and I don't think your income is 10K as it stands, your joint income as a family is 35K. I can see why HMRC think that. I also think it is possibly a bit naive to think you can run a business and, when times are tough, expect to be able to fund (or part fund) a second mortgage to save yourself rent. I know that sounds harsh and it is a shame that you are being targeted when you did it for the best of reasons (your family) but I think that, given the current economic and political climate in this country you maybe need to somehow work out how to survive without the tax credits as your 10k wage comes from your joint business which is not eligible for much tax credit anymore (how will this change next year if projected turnover is lower? Could you reapply then?)

Can you jointly see the accountant and ask them to review the whole financial picture and see what can be done?

EggwiniasRevenge Sun 31-Mar-13 13:14:42

I think that you have done the correct thing with regards tax credit. They have advised you exactly what they advised me. Claim as singke from tge date the relationship broke down.

You see yourself as separate.

It sounds as though the hmrc see evidence which suggests you are not seperated (can you see why it looks like a fraudulent claim to them? This is why they started an investigation). It sounds as though they think they have asked you for evidence to prove otherwise which they haven't recieved (because you didn't recieve the request? )

This is the first part of the problem. This is where you should focus imo. I would suggest finding out what correspondence they have sent, asking for what info. Persue the lines that you have never recieved this and therefore have never had the opportunity to respond.

Unless you sort at the above it's irrelevant whether you are or aren't a coupke in your eyes/there eyes etc. Debating that isn't going to move you forward until you negotiate with them to allow you to provide evidence.

Then you can decide what evidence you need and what is valid or not.

Fwiw it is still possible to have a joint financial interest in the business and investments. The house would count as an investment. Your day to day finances should be seperate. The paying of bills. Business bills can come out of a business account. Mortgages and house maintenance things can come out of a joint account but imo the weekly overheads (utilities etc.) Should come out of a single account in the name of the resident that lives there.

I think you need to work out what finances need to be joint and what don't. It is highly unlikely that they all need to remain joint.

I think it is also worth pointing out that whilst you may have been eligible to make a legitimate claim as a single at this point in time hmrc believe it was a fraudulent claim as an individual. As a result they will treat it as fraud and if that is the case you will be entitled to nothing. I don't think they will convert it to a joint claim retrospectively just to avoid fraud. You need to convince them it is not fraud. If you can't do that then there is no route forward.

Disclaimer: I am not saying it is fraud. I am saying that is what the hmrc see based on the information they have.
I am also saying you need to do xyz but obviously that is what someone needs to do be that you or your accountant.

RedHelenB Sun 31-Mar-13 14:34:43

So to get things straight in my head, all the money you earn from the business goes into the joint account & then you pay the bills on both houses, council tax etc out of this one account that WTC go into as well?

IneedAsockamnesty Sun 31-Mar-13 14:47:15

Fraud is a criminal act should the op be inclined to do so she can force them to deal with it as a criminal act rather than them assuming Based on a balance of probability.

Unfortunately these days they tend to rely on things that previously would have been used to start an investigation as complete evidence rather than having info and finding out more.

There are several clauses within the financial related questions to allow for different circumstances to be taken into account but due to a reduction in manpower they don't appear to have done anything other than the standard computer checks followed by instant decision.

They should at the first point of contact by the compliance team asked you to provide an entire years worth of bank statements along with utilities bills and any further evidence to demonstrate you are single. There is not a chance that that letter was not sent to you.

Chances are you have ignored or forgotten about it.

It sounds like they have decided you are a two house owning family but are all living together as a family.

The only way you can solve this is by doing it yourself alongside someone who is qualified to deal with it using the appeals process. Your accountant will not be that person and chances are it is their actions that have made the situation worse.

Your ex and you can agree on what ever maintenance amount you wish no matter what that figure is and 20% is not the minimum he has to pay its the maximum the csa would make him pay if you chose to use are perfectly entitled to either disadvantage yourself or try for a huge advantage with a private agreement but to have that income disallowed from your tax credits assessment you need it documented that it is maintenance.

BUT just from a being sensible perspective you should think about dismantling your private joint accounts. The two of you are not a couple you should not be equally liable for any poor financial choices that are made in the future and the current financial situation clearly does not work well for you as it has led to you now having to jump through hoops to prove you are not part of a couple and the loss of your income.

EggwiniasRevenge Sun 31-Mar-13 14:48:16

I'm not sure.

I'm not sure I'm clear on how the business is linked to the mortgage. Are there any business related costs associated with the property. Does the business use utilities at the address or is it just a registered address (for eg my ex was a driving instructor. He worked from 'home' but there was no real cost of the business in the bills we recieved as the only utilities he used was a bit of electricity to power the laptop to keep his records. On the other hand mil ran an ironing company so used a lot of electricity to run the presses).

I don't see how your figures stack up so I suppose that the tax credits people would be think similar too. Although surely they should have asked you to provide evidence to either prove or disprove their suspicions of being a joint income family.

I could do with a budgeting lesson from your XH though. If he's paying a £1000+ mortgage and a £400 mortgage from his £25k salary he either has little other outgoings or he's fudging his income. Perhaps the HMRC have looked at things like that to come to their conclusion?
Although you have said it's an overdraft mortgage and I'm not sure what one of those is if that's explains it

Viviennemary Sun 31-Mar-13 16:27:02

I think your claim has been looked at and as you own two houses and run a business and can finance £300,000 worth of mortgate they probably think you don't need any help from the tax payer.

Viviennemary Sun 31-Mar-13 16:27:37


IneedAsockamnesty Sun 31-Mar-13 16:51:47


The claim has been looked at because at the moment there is a huge focus on lone parents claims.

A bog standard credit check has shown a link between op and her ex and they have used that to decide they are living under one roof as a couple.

EggwiniasRevenge Sun 31-Mar-13 16:51:52

Whether she has assets worth £1million is semi-irrelevant.

Tax credits is assessed soley on income. (And hours worked and info relevant to the dcs).

Tax credits are concerned this is a fraudulent claim as these people do not appear to be living a typical seperated life.

There has been a lot of judgement on this thread as to whether there should be 2 mortgages on this income etc.

That's kind of irrelevant.

First question is can you appeal the decision.
Second question is what evidence would you need to win the appeal.
Third question is do you have such and sufficient evidence?

Then once you've dealt with that I woukd start questioning the set up of your joint/individual finances.

KayHunt Sun 31-Mar-13 17:02:09

Would they consider the idea that you have two homes as a reason to stop the claim as well? Maybe they believe that you are gaining income from the property your husband is in.

But still, the accountant has probably made it clear to them that the bills are in joint names, you share a bank account, own two homes with your husband- to anyone outside it does look like you are together and your current and past incomes do not qualify you for tax credits anyway.

IneedAsockamnesty Sun 31-Mar-13 17:14:32


Only if they think she has undeclared rental income from the second home.

Yes she can appeal and go as far as tribunal if warranted.
To win she needs as much as possible that proves she does not live with her ex, letters from professional bodies evidence of his sole occupancy in his house ( they legally cannot ask for this but the op can offer it)
Statements from people who know them the school anyone who the op as spoken to about the break up.
She could even provide a statement from someone she is intimate with or from her ex stating he is not in a relationship with her and is with others.

Her income is not the issue her relationship status is.

Viviennemary Sun 31-Mar-13 17:14:38

I too think that owning two homes would be a factor in your claim. And perhaps also the amount of profit the business is making as a whole and the amount of money you are taking from this profit as your earnings. And of course that this is all intertwined with your husband's earnings from the business will make this claim a complicated one.

IneedAsockamnesty Sun 31-Mar-13 17:20:21


What you think does not matter,what matters is what the rules are. Her claim has been stopped due to them believing she is not separated if there was any other reason they have to tell her.

SofiaAmes Sun 31-Mar-13 17:35:26

Sock clearly knows what she/he is talking about more than anyone else on this thread. OP, I would listen to her and follow her/his advice with care.

My case was a similar one....I called up and asked for advice on how to claim given my circumstances. I then followed that advice. I then got letters saying that they didn't believe those to be my circumstances. I soon realized that this was because at first glance it appeared to be something else and no one had bothered/had time to delve any further into it (or read my first 5 letters). I wrote a final letter with much more detail and referenced the dates and times of my phone calls and letters. That final letter settled the matter, presumably because someone finally delved into it a little further.

IneedAsockamnesty Sun 31-Mar-13 18:04:48

Op, can you obtain letters from as many people as possible both professional and personal to state you are not in a couple relationship with him.

One from him would also help.

They cannot ask you to provide third party info but you can offer it, stuff like a letter from a neighbour or friend and a member of your family.

One of the 'tests' they have is how do friends neighbours and family perceive your relationship status.

Evidence that you do not socialise together as adults or go on holidays together nor do you make future plans together,you don't share meals or household tasks.that nobody who knows you would consider you to be anything other than single.

Copies of anything that you and him have written regarding contact arrangements or maintainance or him no longer being able to use your home freely or as a residence. Even screen shots of emails or text messages will help.

Every and anything you can think of take copies of everything and send it all off so it has to be signed for with a contents index top sheet.

What ever you do do not make a joint claim or anything that increases your links with him.

IneedAsockamnesty Sun 31-Mar-13 18:11:25

By third party info I mean info that breaches your data protection or that you have no legal right to obtain.

But you can breach your own data protection ( or what ever its called these days) and the person who does have the legal right to obtain info about them ( your ex) can obtain it for you. If he does make sure his letter includes that he has only provided the evidence on your request to assist you to prove your single status and he resents feeling morally obliged to do so.

Viviennemary Sun 31-Mar-13 19:02:19

I wasn't saying she shouldn't get the benefit because I said so! But I thought a second home would be included when deciding on entitlement to a means tested benefit. Maybe the withdrawing of the benefit isn't entirely dependent upon whether or not they think she is still living as a couple. It might be withdrawn on other factors. Like she owns a business and could take more salary than she does.

EggwiniasRevenge Sun 31-Mar-13 19:35:00

When you apply for tax credits you tell them:

Your employment status & hours worked.
Your relationship status.
Employment status for any partner if relevant.
Earnings as an employee/self employed.
Any additional income if over £300 (eg sgare dividends, bank interest, rent probably).
Dob of any children
Costs of childcare if relevant.

You don't tell them if you rent/own your own home.
You don't tell them how many homes you own.
You don't tell them how much money you have in the bank.
You don't tell them any of the above because they don't ask.

It is means tested on income. Not assets.
Based on the information in the op hmrc are investigating whether there has been a fraudulent decleration of relationship status.

Why do you think they have stopped it based on information they don't need? Don't request. And almost certainly don't have. And most importantly according to the claiming criteria aren't relevant (they are for other means tested benefits). Especially when they have stated that they are investigating the relationship status

IneedAsockamnesty Sun 31-Mar-13 20:00:56

Exactly what egg said.

Only obviously she said it first grin

Viviennemary Sun 31-Mar-13 20:02:40

Now it is becoming more clear why they are overhauling the benefits system.

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

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

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)

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.

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


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.

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?)

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.

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 23:49:10

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 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.

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?

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.

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.

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.

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.

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.

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


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.

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 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.

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.

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.

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.

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 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 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.

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

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