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Tax credits stopped and asked to pay back for 2 years

(172 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?

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